If we are paying caregivers, do we have to give them a 1099 or w-2 at the end of the year?

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My 2 siblings and I are providing care for my Dad who lives with me. Circumstances have changed and each of us has other commitments that will restrict our availability to be here. There are 91 hours a week that care is needed. Each of us will be here when we can but as Dad can not be left alone, we need to hire a caregiver to fill in various hours. He has mobility issues so needs a companion to make certain if he falls, someone will be here to help. Also, he needs help with meds, making meals, laundry. We have an aide that helps him shower 2 x per week. For reasons I don't want to get into, his home was quit claimed to the 3 of us siblings. He always considered it his home as did we. He continued to pay all the taxes and bills for the property but we recently were made aware that these payments would be considered gifts to us each month. We need to use his income for his caregiving, after deducting his monthly responsibilities- like health insurance and monies for personal items like clothing and haircuts, etc. If we are paying caregivers, do we have to give them a 1099 or w-2 at the end of the year? If we pay ourselves for the caregiving (probably less than 4/hr as that would be all he could pay), do we have to get a 1099 or w-2? Are we responsible for social security or workers comp? We live in CT.

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And what a mess it is. Thanks. We have a friend that is not interested in being paid but we want to give her something for her gas, etc. the majority of time, my siblings and I will be caregiving but we need help. This is so frustrating. We just do not have the funds to pay what an agency would charge. Such a problem for many caregivers. It is a no win situation...
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Reply to Katmar
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The IRS would consider the caregiver to be a household employee, and would require you to withhold all the normal employment taxes, as well as pay the employer share of FICA and unemployment taxes, and issue a W-2.  You may also need to get workers compensation coverage, depending on state law.  The caregiver may not want to be paid "above the table" if they will have to pay income tax on the payments that they may not have been reporting, or may require you to pay them more to cover their taxes.  You may want to consider going through an agency so that they can take care of all of this.
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Reply to AlfredR
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Rules vary based on your state. Generally, yes you need to report the income. You need a care agreement and yes if dad has been paying property taxes it is a gift to you as you and sibs own the house. This will cause dad trouble should be need to go into a facility on Medicaid. The house also sounds like it was a gift that will also cause problems depending on how long ago it was.

See an elder law attorney to help you straighten out this mess that has resulted.
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Reply to gladimhere
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