Reveive your free Custom Care Guide

Let us put together a care guide personalized with the best information on how to care for your elderly loved one.

Stay Informed

Receive weekly AgingCare updates directly to your inbox.

Caution: Caregiving Tax Liability?

Text Size

Having a formal agreement about caregiving in exchange for the family homestead or some other deferred benefit, might be construed as “taxable compensation” as evidenced by the 2003 federal court decision in United States vs. Dieter. Mary Dieter’s receipt of the home was treated as “taxable compensation for services rendered.”  In another circumstance, if the care recipient goes on Medicaid, such an exchange could be considered an illegal divestiture. Understand the laws and plan accordingly.

In conclusion, if you don’t already, with a few adjustments, you may be able to qualify for some of the tax advantages listed in this article depending on your income level and situation. Furthermore, the state in which you live may offer benefits as well. Learn what you can and consult a qualified professional for planning and preparing your taxes. 


June Schroeder is a Certified Financial Planner (CFP®) with Liberty Financial Group in Wisconsin, and has been working in financial services since 1979. Schroeder is also an RN, having received her degree from UW-Milwaukee in 1969. She served for 7 years as the Director of Economic Security for the Wisconsin Nurses Association, making her uniquely qualified for her role as a certified financial planner. She has written extensively for local publications as well as CNBC.COM. She has taught courses and lectured nationally on financial planning for universities and colleges.

(1 to 5 of 25)

Debbiy said
Jan 21, 2008

where can i write to in order to have medicare pay for caregivers services so that i can continue to work. I know that they will pay a portion, i may have to pay a portion, but I am not sure where to write to, and where to submit the certified statement of the doctor. pls respond to p.o. box 12, mauldin, sc 29662

sprintpanda said
Jan 22, 2008

On Dec 21 2002, I was laid off from Sprint. On Dec 24th my dad had a stroke, and became paralyzed on his right side in addition to other medical problems. I have been his caregiver for 5 years. I moved home to care for my parents. I drive them, pay bills and attend Dr appts. I had to buy a van to get him around in also. I have also had to use my savings and now live off my IRA. I have very little left now. I live off 8k to 10k a year and have had to pay taxes and early withdrawel pentalities. I have not had any medical treatments for my own health problems either.

Am I entitled to any help from anywhere? Social Security, local govt, federal govt? When I applied for food stamps, It wanted the household income which including their pension and social security which is less than 10k a year put me over the limit...if I did it right. I need help. I cant take care of my parents anymore. I am going broke. I have never asked for help before

missmia said
Jan 22, 2008

In answer to both questions above, I would direct you to a great service from the AOA. They have a number you can call that can get you the resources and information you need. Call -800-677-1116 for the Eldercare Locator.

This came from a study by the Family Caregiver Alliance:

Most states (all but six) pay families to provide care in at least one of their state-administered programs. We asked state program administrators: "Can family members be paid to provide care in your program?"

Over half (57%), or 86 out of 150, in 44 states and the District of Columbia) say they do. Only Alaska, Delaware, Mississippi, Nevada, Pennsylvania and Tennessee do not allow payments to family members.

A higher proportion of Medicaid waiver programs (36, 74%) than NFCSPs (59%) or state-funded programs (40%) report they allow payment to family members (other than spouses or parents/guardians of minors).

The practice of paying families to provide care may be perceived by some state administrators as a consumer-directed option for the individual beneficiary or consumer (i.e., the care receiver) without directly aiding the family caregiver. Nine of the Medicaid waivers and five of the state-funded programs reporting no consumer-directed option for family caregivers say they do permit beneficiaries to pay family members to provide care.

© 2004

seburke said
Jan 28, 2008

has anyony heard of a program that provides compensation to a person that cares for a brother ( in this) case who receives disability and has all of his life. Until her death my mother had always taken care of my brother and I do it now. Sometimes he lives with me and sometimes I rent him a nearby close apartment. He cannot make any financial decisions by himself, does not recieve enough disability to pay rent, ytilities and buy food so I pay the balance. Several people have told me that tere is a service like this, but I can't seem to find any information. Thanks

Rosie said
Jan 28, 2008

I believe that you would have to become his guradian in order to apply. But each state has different rules and departments that handle this. In general, it's something like the Dept. of Children and Family Services, Dept. of Human Serives or Social Services for your state. There is compensation available, but he may need to be in your home all the time.

Add Your Comment

Only helpful tips, support, and guidance should be entered here.


Must-Read Articles

Growing Your Aging Parent's Wealth During Their Golden Years

Understanding Reverse Mortgages: The Pros and Cons

Warning Signs That Your Elderly Parent's Finances Are Off Track - And How To Deal With It

A Caregiver's Guide to Managing Your Elderly Parent's Investments

Protecting against senior investment fraud

Ask AgingCare - Get Answers from the real experts...other caregivers

Provide additional details 140 Characters Left

Meet our Elder Care Expert

 
Aging Parents and Elder Care Expert

RalphRobbinsCFP

Ralph Robbins

Certified Financial Planner
Boca Raton, Florida

Ralph S. Robbins, CFP© is a fully licensed Certified Financial Planning Practitioner specializing in Eldercare Financial Planning. He works everyday helping families in crisis find creative ways to fund long-term care expenses and deal with family financial issues.

Read this Expert's Bio »

Stay Informed

Sign up to receive weekly updates from AgingCare directly to your inbox.

The material of this web site is provided for informational purposes only. AgingCare.com does not provide medical advice, diagnosis or treatment; or legal, financial or any other professional services advice. Use of this site is subject to our Terms of Use and Privacy Policy.
©2010 MediaBrains Inc. All rights reserved.