Widow w/A&A Hires Caregiver...Is the Caregiver an Employee?

Discussion in 'General Discussion' started by benandjune, Jan 8, 2016.

  1. benandjune

    benandjune Newbie


    My Mom was recently awarded the monthly Widows Pension (I think that different from the Aid and Attendance we have not been able to get approved since Dads death). We will be using these funds to pay the cost of the new in-home caregiver (not a family member).

    The way I read the tax law (Publication 926), the caregiver is Moms employee, and Mom her employer meaning Mom is required to pay a portion of her SSN, FICA and any state taxes Alabama may require.

    Mom gets SS (nontaxable) and nothing else until now, so it’s been years since she had to file a return. The pension is also nontaxable/non-reportable (I think). Mom is late-70's.

    So the question is: I now have to figure out how often to pay the caregiver and do I provide a 1099 (which I don't think is correct) or can I pay the caregiver weekly by check (Moms account), calculate what portion of employee/employer taxes Mom is required to pay and send it to the IRS and the State (unsure if this is quarterly or annually). Records will certainly be kept to show all expenses the pension goes towards...anything else I need to do?

  2. vetadmin

    vetadmin Administrator Staff Member


    No matter who your Mom hires as her caregiver, it is up to the caregiver to report their income and your Mom is NOT responsible for paying ANY portion of SSN, FICA, or any other taxes or deductions. That is strictly the burden of the individual contracted. Your Mom is not in the legal sense her employer.
  3. benandjune

    benandjune Newbie

    Sir or madam,

    I agree it is up to any employee to report wages to the IRS. However...and I'm not arguing by no means; but the basis of my post uses IRS Publication 926 for use in figuring 2015 taxes as a reference.

    Page 2, bottom right topic is, "Do You Have a Household Employee"? - Among others it lists caretakers, health aides, and private nurses. We control what she does and it’s all done in Moms home.

    Further, Table 1 says "IF" you pay cash wages of more than $1,900.00 or more in 2015 to any one household employee...THEN you need to withhold and pay Social Security and Medicare taxes. The taxes are 15.3% of cash wages, your employee's share is 7.65% (you can choose to pay it and not withhold it), and that our share is 7.65%.

    There is more in Table 2 if you pay cash wages and pay over $1000 or more in any calendar quarter of 2014 or 2015 to household employees.

    I can't even dispute the term cash wages because on page 5, bottom left column it defines cash wages."

    The biggest question here remains...does this qualify under the IRS Pub 926 since the "funds" are the widows pension funds from the VA.
  4. vetadmin

    vetadmin Administrator Staff Member

    You hire them as an independent contractor, or through a home health agency.

    I know of no one in over ten years who ever had to pay a portion of any caregiver's taxes.

    You Mom is contracting someone to provide a service to her, and she is paying for that service.

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