I am my grandmother's POA. She has been on Medicaid (Arizona Long Term Care ALTCS in AZ) as well as receives a non taxable benefit of $90 from the VA. She currently lives in an assisted living residence. ALTCS takes all of her income- SS and Pension (other than the VA benefit) and leaves her with a small needs allowance of about $100 a month. ALTCS then pays all of her medical and living expenses. I have done her taxes in the past when received income back. I had filed for an extension in 2013 waiting to hear from any resources about how to pay for her taxes since neither the VA or ALTCS will allow tax payment with her funds. I have been told my numerous people (no association with tax prep or long term care though) that she should not have to pay any taxes or file at all. I have very little time as it is to do her taxes in person and the HR block people had no idea what I was talking about with the ALTCS/Medicaid/VA stuff and said she owed 2k. They hadnt accounted for her home/living/med expenses as they didnt make sense to them. Filing online is easiest but I dont have the funds to pay myself and the agencies wont let me use her funds. I have gone through the online filing programs and they show she owes nothing. But then I have to pay for the filing when complete. I am hoping to find confirmation that she shouldnt have to pay at all. It has been nearly 2 years and no one can answer this for me without having to pay a lawyer. Any guidance would be appreciated. Additionally, she has no home, no car, we did the spend down a few years ago and she has no other situations that should impact things.
Speaking directly to the IRS should hopefully help guide. I have gone through their website to see the 'if you need to pay taxes' questionnaire and was directed to a question about her taxable income regarding her survivor annuity benefit. Filled out the answers based on a form on the OPM site and it seemed as though not enough of her annuity was free of tax to qualify on the irs site to not have to pay. None of this makes sense to a 30 year old to begin with nevermind all of the hoops and jargon along the way. It amazes me how many people have similar questions and yet all of these generic government forms and websites seem to provide no real guidance, same with the Area on Aging sites as well. I guess if you can't pay for help, it's tough to get it.
Thank you both for your help. I will try calling directly and see if they have any additional advice.