Is it fraud to pay yourself for the time you spend managing an aging parents affairs?

my bad, the 1099 would be only if the caregiver has set themselves up as an LLC or an Inc to be a business of caregiving (even if only for 1 person); otherwise it would be the usual W-9 / W-2 situation. And no matter which, all need an I-9.

How is parent paying for NH? If it's all being done private pay and they have enough funds (low to mid6 figures) to pay for years & years (at least 5 years) of NH care, then whatever is done with their assets is a private between the family issue.

BUT if they need to apply to Medicaid to pay for their long term stay @ the NH, the probability will be that Medicaid will do a transfer penalty for the $$ that was given to you to pay for your services from the parents bank account. It will be viewed as gifting and the amount of it and any other $ given, or transferred, to you or other family will be a # of day based transfer penalty. Its my experience that if they find 1 issue for possible transfer penalty, the state will kick the application up from the local caseworker to a regional caseworker who has more forensic experience and programs to ferret out other transfer issues. So think about what other transfers could be out there…..like if grandma gave grandkid $ 300 for graduation.

For Medicaid, the state will need to see several months or years of banking records (for my mom it was a 3 year & 6 month review of all her banking & financials), so the probability will be that the payments will show up. If it was done via a legit business and paid via a check to the biz there will be no transfer penalty. But personally paid to you & your hubs can be totally a penalty. The mileage has to be based on the current federally set rate too - you can deduct at the federal rate at either the biz rate if you have a legit biz you can run this through or the medical rate which is lower.

the state views caregiving and errands run for your parents or elder family members as done for free and out of love and familial sense of responsibility UNLESS there are caregiver contracts set up in advance with caregiver getting a 1099 from parent and both duly reporting whatever's to IRS. Now penalties can be waived or reduced (I did this for a car mom gave to worthless nephew right at the edge of the 5 year review) but it will require that you go out and come up with whatever documentation is needed (and in pretty quick turn around of time too) to prove the amount so that caseworker can approve the application.

You should let your mom know what you're doing unless she is completely incompetent. Most POAs talk about payment for services. Read the document. If you're wondering what Medicaid will say, well, it's my understanding they will disallow it - iff it actually comes to that. Expenses are one thing. Payment for services is another.

Unfair, isn't it?

Jessie makes a distinction I missed. Are you looking for cost reimbursement or payment for the services performed?

Are you still caring for your father at home, as noted in your profile? Does the DPOA authorize payment to you, and if so, does it address categories? If it doesn't, I'd think seriously about paying yourselves.

Does your mother still have her cognitive skills, and if so, did you discuss this with her before moving her to a facility? If she's still of sound mind, I don't think payment to you is appropriate without her concurrence.

Just as importantly, have you been paying yourselvs for any other services performed for your mother? Or is this the first time payment has been considered?

Other factors are whether there are siblings who might challenge your payment.

No, it is not fraud to reimburse yourself for expenses of caring for your mother. If you paid yourself like you were the moving company, it might raise a brow or two. I don't know if it would be illegal, though. It is a good question if there was no written agreement.