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It has been in force since April 2017.
I am seeing a tax guy tomorrow, but I wanted to ask you folks first.
Any words of wisdom?
Thus, if there is no signed employment contract, and no payroll taxes were taken out, and Mom didn't prepare a 1099 for your sister, then your sister needs to see a CPA or experienced tax preparer to find out what does she need to do.
If for some reason within the next 5 years your Mom needs to qualify for Medicaid, Medicaid will see a payment of $1750 per month and that will be questionable. Thus, Medicaid could consider the $21,000 a year a "gift" to your sister unless there was an employment contract. And without a contract this amount is over the allowed $15k per year as a gift, Mom could be subject to paying a gift tax to the IRS.
Yes, all of this can be so darn complicated. It shouldn't be this way :(