I am POA for my uncle and currently working on spending down assets, other necessary things for him to be eligible for Medicaid long term care. He resides in NYS. I am also working with an eldercare attorney. I need to change his pension federal withholding amount to $0. How does that work with filing federal income tax? Should I get an accountant? Has anyone done the taxes for their LO? Is it a penalty since he will not be paying taxes during the year and will most likely owe taxes since he has Social Security and a Pension. NYS allows $31,150 assets and interest will be earned in his checking account also.
Just curious how others have handled taxes when the person is in a long term care facility.
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My question is, if he is over the asset limit for income taxes, how is he not over the income amount for Medicaid? Are you getting a Qualifying Income Trust?
If he has a lot of medical deductions for self pay and the pension income isn’t enough to make more of the SS income taxable, the income taxes may not be as bad as you fear.
He may need to file to get the money withheld refunded.
There are “safe haven” rules to avoid underwithholding penalties, based on how much was owed the previous year or this year, and what percentage of each was withheld.
Why deliberately set the withholding to zero if he would expect to owe money?
Someone qualified to give good Medicaid advice may not be qualified to also give good income tax advice unless they specialize in both areas.
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