Anyone familiar with the new regulations for Medicaid waiver payments based on IRS 2014-7 as well as the Social Security and Medicare portion. I have prepared several amendments due to this new regulation and also filled out the 843 form to recoup the social security and Medicare tax. I was told from 2014 on that this income is to not be included on the tax return, but subtracted out. And also that for prior open years the taxpayer has the option of amending if it benefits them. (Most cases it does, but not all due to EIC if there is no other income). I prepared amendments for 2013 and 2014 for a single mom HOH status and filed the 843. For 2011 and 2012 it was not to her benefit to amend so we filed the 843. She received letters back stating she needed to submit a copy of her amended return for those years to reapply for the social security and medicare refund. I was under the impression these were 2 separate issues and one did not depend on the other. I've tried calling the number for the IRS listed on the letter she received and cannot get through to them. I realize this is new and rare but would appreciate any insight.
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Q&a
If this does not address your issue (if you did not already reference it), as you say the wait on the IRS telephone #s is terrible and not getting better
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Additional info
See link and check the various sections and sub sections shown. While on hold with the IRS you should have enough time to read it all.
Always cite your source for support to defend your opinionComment
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I've read the IRS question and answers many times and given copies to customers who need to send proof they qualify so they know what documentation to send. But it does not address the question I need answered. It is about who qualifies to exclude the income that is Medicaid waiver payments. The second site for Cornell law talks about Medicaid not Medicaid waiver payments. Two different things. Probably not something many ever run across. I know several people personally affected by this which brought it to my attention and have met quite a few more over the past few months by referral because I have some knowledge about it. Still need to find out if filing the 843 is connected to the 1040XComment
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Additional
Additional info. Yes it is unclear if amended returns can be done. Have you tried to contact one of the special needs organizations to get a ruling from the IRS. SEE LINK BELOW:Originally posted by Bonnie View Post
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I've talked numerous times with Communicare who handles the Medicare wavier payments in our county and they have no clue about anything. I've tired to enlighten them and they are so not interested or involved in any way. Sad situation but that's the reality of it.Comment
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Don't
Don't give up on such a very important issue for a very special group of people who need our support. You are to be complimented and those you are helping know they have your support.Originally posted by Bonnie View Post
Suggestion is to contact your Congessional representatives along with anyone who cares about this very important issue.
Also try this organization for support. http://specialneedsanswers.com/contact-us
Keep us posted.Last edited by TAXNJ; 06-19-2015, 08:26 AM.Always cite your source for support to defend your opinionComment
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Not sure if this will be of any benefit to you, and I can't even vouch for its reliability.
You may even be way beyond the info in the article and its links.
But just in case there's something helpful in there, here it is:
"The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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Excellent
JohnH - excellent work.Originally posted by JohnH View Post
Bonnie - what JohnH referenced is what you need. see link below.
Especially second to last paragraph. Also, last paragraph of the notice provides principal author of this notice is Victoria J. Driscoll of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information regarding this notice, contact Ms. Driscoll at (202) 317-4718 (not a toll-free call).
The complete notice is available online at http://www.irs.gov/pub/irs-drop/n-14-07.pdfAlways cite your source for support to defend your opinionComment
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Waiver
I discussed this with PICS, a local payroll processor in the Mpls, MN area, and they say the amounts paid to a relative for performing PCA services in their home they provide are exempt from federal and state income taxes, but subject to Fica and Medi.Comment
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Payments are exempt from federal and state tax if the provider and payee live in the same home, regardless of relationship. If it is a parent caring for their own child, the payments are also exempt from social security and medicare taxes. If any other relationship or no relationship then still subject to social security and medicareComment
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