Minnesota, as well as the rest of the country, is facing a shortage of home caregivers. According to an article in the TIMES, “Who Will Care for the Baby Boomers,” there’s an upsurge of unpaid family caregivers in America, and that number is growing at an alarming rate. “Compounding pressure on this unpaid labor force is a shortage of paid caregivers to fill a growing class of jobs that are troubled by low pay and poor working conditions.”

Some states, including Hawaii and Maine, are beginning to take action. Each working to create solutions that ensure family caregivers receive compensation for their homecare services—as this may help positively address the impending caregiver crisis. Programs like these provide incentives and support for people who are already caring for family members. However, at Best Home Care, we feel that there is more to be done at both state and federal levels, and that Minnesota, too, should implement new strategies (and incentives) to keep family caregivers involved in their loved one’s daily care.

The Benefits of Notice 2014-7

Back in 2016, we shared information on a special tax exemption for PCAs (personal care assistants) and caregivers. Notice 2014-7 was enacted in 2014 to help caregivers save hundreds to thousands of dollars in annual taxes. How it works is a caregiver’s income (the amount he receives for providing homecare services) is exempt from both federal and state taxes if

  • the individual receiving home care is on a Medicaid waiver; and
  • the caregiver or PCA providing home care lives with the individual

We believe this tax exemption provides extra incentive for people to become caregivers in the first place—especially if the individual is a parent or sibling and lives in the same household as you.

But is Notice 2014-7 Enough?

Though Notice 2014-7 is an invaluable benefit for some caregivers, certain restrictions apply. For example, if the individual receiving care does not live with you, you, the caregiver, may not qualify for this tax break. This again leaves us with the same staffing crisis in the homecare industry, as many PCAs, whether family members or not, do not live with their clients.

We believe Notice 2014-7 should be expanded to provide a tax exemption to any family member providing homecare services, regardless of living situations. What impact would this have? We believe an extension of this caliber would entice family caregivers to fill the gaps from the growing caregiver shortage and help reestablish the tradition of caring for loved ones as they age. Perhaps, we could even expand the exemption to any PCA who’s providing homecare services, regardless of whether their client is a family member or relative? Would this help end the crisis?

What’s your opinion? Do you think an extension of IRS Notice 2014-7 would help drawn in more quality candidates to the homecare industry? Follow us on Facebook to share your thoughts and to connect with other PCAs and caregivers. To learn more about this staffing crisis in homecare, stay connected to our blog or contact us for new information.