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My spouse is caring for her 92 yo mother in our home. We retrofitted a room in our home to do this. Her mother’s estate trust is providing our household with a stipend to support her, including food, equipment and my spouse’s time (as she stopped working to do this). We will of course seek advice from an accountant, but we were interested in other’s experiences. Must she declare this money as income? It’s complicated, as there are many expenses, and other intangible costs, associated with having her live with us. If any of you have experience with a similar situation, or are financial professionals familiar with the potential tax implications of such an arrangement, I would be grateful for your experience/advice/insight.

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This IRS explicitly says that inhome domestic help is to be treated as employees. That means....social Security, Medicare, Federal income taxes must be withheld and paid quarterly to the IRS by the employer...in this case: Mom.

hopefully, you are keeping good records. What she reimburses you for her expenses is not taxable...it isn’t income. BUT, if you don’t keep good records....you could run afoul of the Medicaid look back if it ever came to it.
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Andy22 May 29, 2019
Thanks - we will look into that. A
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Why do you think income would not be reportable or taxable?
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Andy22 May 29, 2019
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