Medical Ins Premiums

[S T]

Mother employs her daughter as a Caregiver, Mother is disabled with Parkinson's.

Mother issues W-2 form and files Schedule H - Household Employee and pays all Federal and State employment taxes.

Mother also pays for daughter/Caregiver Medical Insurance Premiums, much the same as any employer would.

Question: Since Mother is a Household Employer - can mother deduct the cost of the Medical Premiums as part of the Caregiver costs under Medical Schedule A?

Sandy

[erchess]

I don't see how

she can deduct premiums paid on an employee on her own Schedule A.

I have never actually done a payroll tax form but I thought that any employer would total up the money that was due the IRS for such things as withholding and FUTA and the employer's share of FICA and subtract out amounts paid for nontaxable employee benefits. Is a household employee somehow treated differently at this point??

Is the daughter's pay the only reason the mother cannot claim the daughter as a dependent? In particular, counting the pay as support provided by the daughter, is the mother supporting the child? If so and if everyone forgets about any link between the insurance and the job then the mother could deduct the insurance on her Sch A as though the daughter were a dependent. The same would go for any other medical expenses of the daughter paid by the mother.

[S T]

Caregiver

As with many employers, the Mother in this case is paying for Health Care for the Caregiver, which just happens to be her daughter, rather than a private party or going through a Caregiver Agency. The daughter is a licensed nurse practioner.

Under household employee and one that is providing maintenance and personal service for long term care (which this is) you are able to deduct the wages, and associated payroll taxes as a medical expense.

The question then arose as to whether or not the health insurance provided for a caregiver employee would then also be deductible, and the only scheduled deduction that I can think of is under the Schedule A medical for the Mother, as a cost for Nursing/Caregiver.

Sandy

[Gene V]

My guess, the health insurance premium would be part of the employment package and would be a medical deduction. Otherwise, you could pay the employee the difference in wages and they could pay for there own insurance. Here is one link about health insurance for household employees.

http://www.4nannytaxes.com/FAQ/HouseholdEmployeeHealthInsurance.cfm

I haven’t had this situation yet—so would have to do more research.

[S T]

Household Employee

Thanks Gene,

That will help point me to further research for Household Employee Caregivers.

Sandy