I understand that a Caregiver Agreement between a parent and child will preserve assets in a Medicaid situtation. Mom pays daughter for her services, at a reasonable rate, but I'm not sure how to report it. Does daughter get a W2 from Mom who reports it on Scheudle H? thanks for any assistance on this.
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I had one
Daughter was a caregiver, and as a matter of fact had a nursing license.
What we did was put the Daughter on a W-2 reporting - Schedule H and your appropriate state, and paid all employment taxes, Federal and State.
For this taxpayer I did not have to do Federal 941 - as Schedule H was present on the Form 1040, but I did have to file State Quarterly reports. So would depend on your State.
As a side note, The wages and employment taxes were deducted on Sched A medical for the Taxpayer receiving the Care.
Not sure about the Medicaid, as my taxpayer and daughter who is also a client were not involved in that.
Sandy -
The only thing I can think of that might affect Medicaid is that perhaps the expense of the caregiving would lower the Mom's income? Not sure at all about that. You need to check with your state's Medicaid office -- they should have a website. Otherwise, ST is correct on the W-2 filing, the Sche H completion to pay the taxes, and deducting expense on Sche A as medical expense.Comment
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It would avoid the lookback period
My undestanding is that since Mom is paying the daughter for her services, those expense are coming out of Mom assets and are not subject included in the five year lookback period - as gifts are.Originally posted by Burke View Post
Thanks for the good info.Comment
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If it is taxable wages, it is not a gift.Comment
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