Am I allowed to give my direct care workers additional money on top of what they are receiving from the program and would I be required to take out taxes on that additional money?

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I receive aid from a program funded by the office of long-term living for home health care and have a fiscal manager that pays my workers wages and taxes.

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If you are doing a one time bonus...probably not an issue.

If you plan to pay an additional salary to them....then, yes..you become the employer. That means you have to do tax withholding (Medicare and social security too). The penality is stiff enough to make it totally not worth it when you get caught. And you will get caught.

When that employee goes to file unemployment after leaving the job with you....think they would know what you did and come for the money? If that employee is hurt....seeking the total compensation for workers Comp....the agency is coming for you.

IRS rules say..any one working in-home aide is an employee and withholding must be done.
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