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We have been having a couple of girls do in-home care for 4 hours a day for my Mom who has dementia and is on hospice. It is more of just a companion as Mom wants someone with her at all times holding her hand. My sister has her food made, just creamed soups and puddings to be warmed in microwave and mom is able to feed herself. I bathe her, give her meds, do her hair etc. This is only like a companion, she is continent and mobile, but wants to walk much of time holding our hand.


What I am wondering is my Dad's assets do not qualify for any help with Medicare, government assistance, etc. My parents are not wealthy, just not in that category.


I understand that at $600.00 you must file a 1099 tax form and the caregiver also must file a tax form. I'm wondering if this is correct as these caregivers are not from an agency.


Thanks so much

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Greatgrandma82- If your caregiver friend is eligible for social security, having a lot of zero earnings quarters will affect his or her payment when they retire. Someone to whom I deliver Meals on Wheels often says that one of her clients insisted on paying into Social Security for her during her lifetime work as a home cleaner and it's the reason she gets a check today. "My own little money" she calls it.
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Not a 1099, but a W-2.  Anyone who provides those kinds of services and is paid over $2,100 a year is considered a Household Employee, and you are required to withhold and pay all of the typical payroll taxes, including the employer's share of FICA and Medicare.  This would also apply if you pay a total of more than $1,000 to all household employees in one quarter.  Since they will be getting a W-2, the recipients will have to report the income on their tax return.  They may not be very happy about this, which is why many people prefer to be paid "under the table" for these kinds of services.
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I think you must take out for SS. Their share and yours too. Federal u may not have to if they can be considered self employed. If I were u, I would consult with a CPA
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Dear helpingmom -
The simple answer is yes, you are required to file a form 1099 for any amount paid over $600(in a calendar year)and give a copy to the caregivers.
For more information, about what you are required to do with household employees... Do a Google search -
Topic Number 756 - Employment Taxes for Household Employees
And read it from the irs website.

Hope this helps.
Sparkles
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I just all but finished a long explanation of how my dad's and mother's care was financed etc. And it disappeared. I have a terrible computer. Now I will summarize and hope. My dad privately hired so that he could negotiate salary. But he did take off monthly deductions and filed taxes at year's end. These deductions negatively effect the salary, but he was able to afford independent living with one meal provided just until the end. They were both school teachers. My mother passed and my dad declined and I took over finances. I only kept one of the girls on the tax procedure for a number of years. Now I negotiate a salary for my caregiver friend for my husband and I pay no taxes. I am a god-fearing person and an IRS - fearing person, but how are we to manage on 25+ year pensions with no COLA in sight and social security that eats up any COLA with medicare costs? We do not qualify for any reduction in cost. I use an agency at $20 an hour at times so as to keep my foot in the door. It seems that most other people do qualify in this low income county. I am known as the "private payer" for multiple agency services and I am not bragging.
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