Ihss exemption form

Ihss exemption form DEFAULT

Certain Medicaid Waiver Payments May Be Excludable From Income

On January 3, 2014, the Internal Revenue Service issued Notice 2014-7, 2014-4 I.R.B. 445. Notice 2014-7 provides guidance on the federal income tax treatment of certain payments to individual care providers for the care of eligible individuals under a state Medicaid Home and Community-Based Services waiver program described in section 1915(c) of the Social Security Act (Medicaid Waiver payments).

Section 1915(c) enables individuals who otherwise would require care in a hospital, nursing facility, or intermediate care facility to receive care in the individual care provider’s home. The notice provides that the Service will treat these Medicaid waiver payments as difficulty of care payments excludable from gross income under § 131 of the Internal Revenue Code.

Individual care providers who receive Medicaid waiver payments for the care of eligible individuals in their homes and payers of Medicaid waiver payments have raised several questions not addressed in Notice 2014-7. The following questions and answers clarify the notice and provide guidance on the information reporting requirements, and the employment tax requirements for Medicaid waiver payments described in the notice.

Individual Care Provider Questions

Q1. I receive payments under a state Medicaid program other than a Medicaid Home and Community-Based Services waiver program for the personal care of my adult disabled son in our home. May I exclude these payments from gross income?

A1. Whether the Service will treat payments under a state program other than a state Medicaid Home and Community-Based Services waiver program as difficulty of care payments excludable from gross income will depend on the nature of the payments and the purpose and design of the program.

Q2.  I moved into my elderly mother’s home to care for her, and I do not have a separate home where I reside. I receive payments under a state Medicaid Home and Community-Based Services waiver program for personal care and supportive home care. Am I considered to be providing care in “the provider’s home” for purposes of Notice 2014-7?

A2. Yes. Under § 131, “the provider’s home” means the place where the provider resides and regularly performs the routines of the provider’s private life, such as shared meals and holidays with family. See Stromme v. Commissioner, 138 T.C. 213 (2012). In this situation, the mother’s home became the provider’s home because it is where the provider resides and regularly performs the routines of the provider’s private life.

Q3. I am an individual who cares for an unrelated elderly person five days a week in her home, and I have a room in the care recipient’s home where I sleep four nights a week. I receive Medicaid waiver payments for this care. On weekends and holidays, I reside with my family in our separate home. May I exclude these payments from gross income?

A3. No. In this situation, the provider works in the care recipient’s home, but the provider has a separate home where the provider resides and regularly performs the routines of the provider’s private life, such as shared meals and holidays with family. Therefore, the provider does not provide care for the care recipient in the provider’s home, and the provider may not exclude the Medicaid waiver payments from gross income.

Q4. I am an individual who cares for an unrelated elderly person seven days a week in her home where I live. I receive Medicaid waiver payments for this care. I do not have another home. May I exclude these payments from gross income?

A4. Yes. In this situation, the care recipient’s home is also the care provider’s home, and the care provider does not have a separate home. Therefore, the Medicaid waiver payments are excludable from the care provider’s gross income for the care furnished in the shared home.

Q5. I am the parent of a disabled child, and I receive state Medicaid Home and Community-Based waiver payments excludable from gross income under Notice 2014-7 for the care of my child in our home. My sister lives with me, and she also receives state Medicaid Home and Community-Based waiver payments for the care of my child. May she exclude the Medicaid waiver payments from gross income?

A5. Yes. More than one care provider living in the home with the care recipient may exclude state Medicaid Home and Community-Based waiver payments from gross income under Notice 2014-7.

Q6. I am a respite care provider, and I provide personal care and supportive services to disabled individuals in their homes, or in my home where the care recipient does not live. I receive payments for this care under a state Medicaid Home and Community-Based Services waiver program. May I exclude these payments from gross income?

A6. No. The exclusion only applies to payments for care in the individual care provider’s home where the care recipient lives under the recipient’s plan of care.

Q7. I am an individual care provider, and I receive payments under a state Medicaid Home and Community-Based Services waiver program for the care of a disabled individual who lives with me in my home under the individual’s plan of care. The program has a cost-sharing provision that may require an individual to pay the administrator of the program a portion of the total amount that the administrator pays me for the care of the disabled individual. May I exclude the entire payment that I receive from the administrator for the individual’s care?

A7. Yes. You may exclude the entire payment that you receive under the state Medicaid waiver program for the care of the disabled individual in your home even though the individual is required to pay the administrator part of the cost of the care. By contrast, an individual care provider may not exclude direct payments from a care recipient who pays part or all of the cost of the recipient’s care with the care recipient’s private funds.

Q8. I am an individual care provider, and I receive vacation pay from the state, as well as Medicaid waiver payments for the care that I provide to a disabled individual living in my home under the individual’s plan of care. May I exclude the vacation pay from gross income?

A8. No. The only amounts excludable from gross income under Notice 2014-7 are payments for the care of the disabled individual.

Q9. I received payments described in Notice 2014-7 that are treated as difficulty of care payments under § 131. May I choose to include these payments in earned income for purposes of the earned income credit (EIC) or the additional child tax credit (ACTC)? (Added May 8, 2020.

A9. Yes, for open tax years, you may choose to include all, but not part, of these payments in earned income for determining the EIC or the ACTC, if these payments are otherwise earned income (wages or income from self-employment).

Q10. If I received payments described in Notice 2014-7 in an earlier year, may I file an amended return to exclude the payments from gross income that I reported as income in the earlier year?

A10. Yes. You may file a Form 1040-X, Amended U.S. Individual Income Tax Return, if you received payments described in the notice in an earlier year and the time for claiming a credit or refund has not expired under § 6511 of the Internal Revenue Code. A taxpayer generally may file a claim for refund within three years from the date the return was filed or two years from the date the tax was paid, whichever is later. For more information, see “When To File” in the instructions to Form 1040-X or Tax Topic 308, Amended Returns, available at /taxtopics/tc308.html. In Part III of Form 1040-X, you should explain that the payments are excludable under Notice 2014-7. Excluding payments described in the notice in an earlier year may affect deductions or credits that you claimed for the earlier year, as well as other tax items for the earlier year. To help expedite the processing of your amended return, you should include the following to substantiate your claim: (1) the full name of the individual receiving care (and the care recipient’s social security number or other taxpayer identifying number, if available); (2) copies of documents from third parties to show that you and the individual receiving care resided in the same home in the year to which the claim relates (such as a driver’s license or other government-issued document, social agency document, bank statement, medical bill, or utility bill); and (3) evidence that the individual is receiving care under a state Medicaid waiver program. 

Q11. I received wage payments that are excludable from gross income under Notice 2014-7. However, the agency that pays me treats me as an employee and continued to withhold federal income tax on the payments and reported the payments as wages in box 1 of Form W-2, Wage and Tax Statement. How should I report to the Service that the payments are excludable from gross income?

A11. You should include the full amount of the payments reported in box 1 of Form W-2 as wages on line 1 of Form 1040 or Form 1040-SR. You should then subtract the excludable portion of the amount in box 1 on Schedule 1, line 8, “Other income,” of Form 1040 or Form 1040-SR. If you have other income reportable on Schedule 1, line 8, you should enter the net amount after subtracting the amount excludable from gross income under Notice 2014-7 from the other amounts reportable on Schedule 1, line 8. You may need to enter a negative amount on Schedule 1, line 8, if you have no other income reportable on Schedule 1, line 8, or if the amount of other income you must report on Schedule 1, line 8 is less than the amount excludable from gross income. You should write “Notice 2014-7” on the dotted line for Schedule 1, line 8,  if you file a paper return, or enter “Notice 2014-7” on Schedule 1, line 8 for an electronically filed return.

Q12. I receive payments that are excludable from gross income under Notice 2014-7. Are the payments subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA)?

A12. Maybe. Whether the payments are subject to social security and Medicare taxes depends on whether you are an employee of the agency, an employee of the individual care recipient, or an independent contractor. If the agency is your employer, the payments are subject to social security and Medicare taxes. See Q&A 18 under Agency Questions. If the care recipient is your employer and these payments are wages for that employment, the payments are subject to social security and Medicare taxes unless one of the exceptions for domestic services applies. See Q&A 19 under Agency Questions. If you are an independent contractor, the payments are not subject to social security and Medicare taxes. See Q&As 13 and 14.

Your status as an employee or independent contractor and the identification of your employer (if you are an employee) depend on whether the agency or the care recipient has the right to direct and control how you perform your services. Tax Topic 762, available at /taxtopics/tc762.html, provides information and additional resources on how to determine whether you are an employee and, if so, who your employer is. If you think you are being improperly treated, you can file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, to have the IRS determine your employment status.

If you believe social security and Medicare taxes were withheld in error from your payments, such as because one of the exceptions for domestic services applied, you must first contact the agency that withheld the taxes for a refund. However, if the agency indicates an intention not to file a claim or adjust the overpaid social security and Medicare taxes, you may claim a refund of the erroneously withheld social security and Medicare taxes by filing Form 843, Claim for Refund and Request for Abatement. The requirements for filing a claim for refund of your share of social security and Medicare taxes can be found in the Instructions for Form 843.

Q13. I provide services under a state Medicaid Home and Community-Based Services waiver program. The agency that pays me for these services does not treat me as an employee, and I do not have a separate trade or business of providing these services. However, the agency reported the payments as income on Form 1099-MISC, Miscellaneous Income. How should I report to the Service that these payments are excludable from gross income?

A13. You should enter -0- on line 21 of Form 1040 if you have no other income reportable on line 21. If you have other income reportable on line 21, you should enter the amount of the other reportable income on line 21. You should write “Notice 2014-7” on the dotted line for line 21 on a paper return or enter “Notice 2014-7” on line 21 for an electronically filed return. Because the payments are excludable from income, and because you do not have a trade or business of providing these services, the payments are not self-employment income subject to self-employment tax.

Q14. I am a sole proprietor in a business of providing home care services. In my business, I received payments that are excludable from gross income under Notice 2014-7. However, I received a Form 1099-MISC, Miscellaneous Income, reporting these payments as income. How should I report to the Service that these payments are excludable from gross income?

A14. You should include the full amount of the payments reported to you on Form 1099-MISC as income on line 1 of Form 1040 (Schedule C). You should then report the excludable amount as an expense in Part V, and write “Notice 2014-7” next to that amount. Even though you are a sole proprietor, because the amounts are excludable from income, they are not self-employment income and are not subject to self-employment tax. For additional Q&As discussing the application of self-employment tax to family caregivers, follow this link:  /Businesses/Small-Businesses-&-Self-Employed/Family-Caregivers-and-Self-Employment-Tax. 

Agency Questions

Q15. As an agency that is a certified Medicaid provider, I make payments under a state Medicaid Home and Community-Based Services waiver program. What information should I request from individuals who claim the payments they receive are excludable from gross income under Notice 2014-7?

A15. If you do not have independent knowledge that the payments you make are excludable from gross income under Notice 2014-7, you may rely on a written statement by the payee, signed under penalties of perjury, unless you know that the statement is not true. The statement should affirm the facts you need to determine that Notice 2014-7 applies to the payee. For example, a statement may be worded as follows:

Under penalties of perjury, I declare that I am an individual care provider receiving payments under a state Medicaid Home and Community-Based Services waiver program for care I provide to ___________________ who lives in my home under the care recipient’s plan of care.

Signed:                          Date:         

Q16. I am an agency that employs individuals who provide care to disabled individuals under a state Medicaid Home and Community-Based Services waiver program. Some of the payments I make are excludable from the employee’s gross income under Notice 2014-7. Am I required to withhold federal income tax on the payments that are excludable under Notice 2014-7?

A16. No. Federal income tax should not be withheld from the payments that are excludable from gross income under Notice 2014-7. If you do not have independent knowledge that the payments are excludable from gross income under Notice 2014-7, you may rely on a written statement by the employee, signed under penalties of perjury, unless you know that the statement is not true. The statement should affirm the facts you need to determine that Notice 2014-7 applies to payments made to the employee. See Q&A 15.

Q17. How do I complete the Form W-2, Wage and Tax Statement, that I provide to my employees who receive payments excludable from income under Notice 2014-7?

A17. Any amount excludable from gross income should not be included in box 1, Wages, tips, other compensation, of the employee’s Form W-2. If the entire amount you pay to the employee during the year is excludable from his or her gross income, box 1 of Form W-2 should be left blank.

Q18. If the payments I make to my employees are excludable from gross income under Notice 2014-7, am I required to withhold and pay social security and Medicare taxes under the Federal Insurance Contributions Act (FICA) on the payments?

A18. Yes. Even if payments you make to your employees for their services are excludable from gross income for federal income tax purposes, they generally are wages for social security and Medicare tax purposes. Thus, generally, you should withhold and pay social security and Medicare taxes, and report the social security and Medicare wages and taxes withheld on the employee’s Form W-2. However, see Q&A 19 below if you pay the individuals but you properly treat them as employees of the care recipients.

Q19. I pay individual care providers to care for disabled individuals and properly treat the care providers as employees of the care recipients. I fulfill the employment tax responsibilities for the care recipient. If the payments I make to the care providers on behalf of the care recipients are excludable from gross income under Notice 2014-7, am I required to withhold and pay social security and Medicare taxes on the payments?

A19. Maybe. Although payments you make to the care providers as employees of the care recipients may be excludable from gross income for federal income tax purposes, those payments are generally wages for social security and Medicare tax purposes. However, there are several important exceptions to this rule. If the care recipient is the employer of the individual care provider, the FICA tax rules for domestic service (household work done in or around the employer’s home) will apply. Under those rules, payments for services performed for a spouse or a child and services performed for a parent by a child under the age of 21 generally are not subject to social security and Medicare taxes. In addition, if wages for domestic services paid during a calendar year are below a threshold ($1,900 for 2014), they are not subject to social security and Medicare taxes. See Publication 926 for more information on these exceptions. If you withheld and paid social security and Medicare taxes in error because you did not correctly apply one of these exceptions, see the Instructions for Form 941-X, Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund.

Q20. I am an agency that is a certified Medicaid provider and I pay individual care providers to care for disabled individuals. Due to the facts and circumstances of how they perform their services, I do not treat the individuals as my employees or as employees of the care recipients, so the payments are not subject to social security and Medicare taxes. Some of the payments I make are excludable from the individual care provider’s gross income under Notice 2014-7. What are my information reporting requirements?

A20. Generally, a payer must file Form 1099-MISC, Miscellaneous Income, to report payments to an independent contractor as compensation for services if the payments are $600 or more during the calendar year. However, if you know that payments to an individual care provider are excludable from gross income under Notice 2014-7, you should not file a Form 1099-MISC reporting those payments. If you do not have independent knowledge that the payments are excludable from gross income under Notice 2014-7, you may rely on a written statement by the payee, signed under penalties of perjury, unless you know that the statement is not true. The statement should affirm the facts you need to determine that Notice 2014-7 applies to the payee. See Q&A15.

Sours: https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income

Form SOC2298 "In-home Supportive Services (Ihss) Program and Waiver Personal Care Services (Wpcs) Program Live-In Self-certification Form for Federal and State Tax Wage Exclusion" - California

State of California – Health and Human Services Agency
California Department of Social Services
IN-HOME SUPPORTIVE SERVICES (IHSS) PROGRAM AND
WAIVER PERSONAL CARE SERVICES (WPCS) PROGRAM
LIVE-IN SELF-CERTIFICATION FORM FOR FEDERAL AND
ALL INFORMATION MUST BE COMPLETED IN ENGLISH.
SEE PAGE 2 FOR INSTRUCTIONS.
Provider Self-Certification
By completing this form, you are certifying that the wages you receive for providing
IHSS and/or WPCS services to the recipient named above will be excluded from your
federal and state personal income taxes.
Under penalties of perjury, I declare that I am a provider receiving payments under the
IHSS and/or WPCS programs for care I provide to ____________________________,
who lives with me in the same home.
RETURN COMPLETED FORM TO:
IHSS – IRS Live-In Self-Certification
West Sacramento, CA 95691-6677
State of California – Health and Human Services Agency
California Department of Social Services
IN-HOME SUPPORTIVE SERVICES (IHSS) PROGRAM AND
WAIVER PERSONAL CARE SERVICES (WPCS) PROGRAM
LIVE-IN SELF-CERTIFICATION FORM FOR FEDERAL AND
ALL INFORMATION MUST BE COMPLETED IN ENGLISH.
SEE PAGE 2 FOR INSTRUCTIONS.
Provider Self-Certification
By completing this form, you are certifying that the wages you receive for providing
IHSS and/or WPCS services to the recipient named above will be excluded from your
federal and state personal income taxes.
Under penalties of perjury, I declare that I am a provider receiving payments under the
IHSS and/or WPCS programs for care I provide to ____________________________,
who lives with me in the same home.
RETURN COMPLETED FORM TO:
IHSS – IRS Live-In Self-Certification
West Sacramento, CA 95691-6677
State of California – Health and Human Services Agency
California Department of Social Services
Instructions for filling out the Live-In Self-Certification Form
1. All requested information must be entered in English on the form in the designated
2. You must sign the form on the designated line.
3. You must provide the date the form was signed on the designed line.
4. Only use black ink and please print clearly.
5. Do not wrinkle or staple the form.
6. Provider Name: Enter your name as it appears on your IHSS paperwork.
7. Provider Number: May be found on your IHSS paperwork – (Provider Notification
of Recipient Authorized Hours and Services and Maximum Weekly Hours, Provider
8. Recipient Case Number: May be found on your IHSS paperwork – Provider
Notification of Recipient Authorized Hours and Services and Maximum Weekly
Hours, Provider Timesheet, etc.
9. Recipient County of Residence: Please enter the county where you and your

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Find a Care Recipient

The IHSS Public Authority will help match you with Care Recipients if you don't have one in mind:

  • Sign up with the Public Authority Registry after you’ve become an IHSS Care Provider.
  • Call (415) 243-4477 for more information.

Want to work for multiple Care Recipients? Sign up with the Public Authority just once. Re-enrollment is required only if you have not worked for an IHSS Care Recipient for more than a year. 

 

Training

As an IHSS Care Provider you are eligible to enroll in Homebridge’s training courses. If you have had a client within the last 12 months you may be eligible to receive a $15 - $400 stipend after you complete a course (some restrictions apply).  

IMPORTANT COVID-19 NOTE: Training is temporarily suspended due to the Coronavirus.  We are working with Homebridge to implement on-line training opportunities.  Check back for more information.

 

Change of address & phone number (for San Francisco County only)

For San Francisco IHSS Providers ONLY: Complete the Change of Address and Phone - Form 840 (English | Español | 中文) and

  • Email it to [email protected]
  • Or mail it to IHSS Independent Provider Assistance Center (IPAC), P.O. Box 7988, HSA IHSS N3AX,  San Francisco, CA 94120
  • Or drop it off at IPAC, 2 Gough Street, Monday-Friday, 8:00 a.m -5:00 p.m

Care Recipients must notify their IHSS social worker to change their address.

 

W-2 & W-4 tax forms

  • Download a Form W-4 directly from the IRS website, fill it out, and submit it to IPAC
  • You should receive a Form W-2 by mail directly from the state at the end of the tax year.
  • Didn't receive your W2? You can request a duplicate from IPAC at (415) 557-6200.

Note: Some certified live-in Care Providers do not receive Form W-2 because they are exempt from Social Security tax. Learn more about self-certification requirements.

 

Employment verification

To provide employment verification to an employer:

Sours: https://www.sfhsa.org/services/care-support/home-supportive-services-ihss/provide-home-services/manage-your-provider
Applying for In Home Supportive Services (IHSS)
15591044_1156186861103582_1475008673720324819_o

This page is a work in progress. Please include your suggestions and ideas in the comments below.

Do I Pay Taxes on My IHSS Income?

If you live with your client, your IHSS income is exempt from taxes.

If you do not live with your client, it is not exempt and you will pay taxes.

This is because of a special IRS regulation called difficulty of care income tax exclusion.

How To Exclude IHSS Income

Instructions from the IHSS Guide for Advocates:

IHSS wages received by IHSS providers who live in the same home with the recipient of those services are excluded from gross income for purposes of federal and state income tax. A live-in provider must fill out an SOC 2298 Live-In Self Certification Form for Federal and State Tax Wage Exclusion in order to receive this benefit. If the provider prefers to pay taxes out of their check, they do not have to file the self-certification form.

How to File Taxes

From intuit, this article explains How to Report Excluded Income on your tax forms.

Child Tax Credit and Earned Income Tax Credit

If you do not pay taxes on this income, can you still get an earned income credit? And child tax credit? There is not (yet) a published IRS regulation on this topic. However, in this court ruling, it was found that tax credits can be claimed.  Please consult with your accountant on next steps.

Reader’s Tip

IHSS payments can still be included on taxes and excluded from ‘gross income’. This is critical because they still can affect the tax credits or other tax-related matters, such as qualifying income for contributing to a Roth IRA.

Oh No! Taxes Were Already Taken Out!

If you are a live in provider and you paid taxes in the past (and now realize you should not have), it’s not too late: How to Amend Past Taxes

Thanks for Reading

Learn more about: How Can I Get My IHSS Income Excluded from SSI? Medi-cal? CalFresh? Taxes? HUD? Housing Vouchers?

 

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Exemption form ihss

The California Department of Social Services (CDSS) has issued guidance regarding exceptions from the IHSS provider overtime limits for extraordinary circumstances.  In general exceptions from the overtime limits are available if (1) the recipient has complex medical or behavioral needs that must be met by a provider who lives in the same home as the recipient; (2) The recipient lives in a rural or remote area where available providers are limited or (3)–The recipient is unable to hire another provider who speaks the same language as the recipient.  (See ACL 18-31.)  These criteria are called the Exemption 2 criteria.

When there is a request for an Exemption 2 overtime exemption, the county must accept the request regardless of whether it appeals the provider will be determined eligible.  When a verbal request is made, the county should provide the individual with a form SOC 2305.

Counties can rely on information in CMIPS but should not deny an Exemption 2 request based only on information in CMIPS.  Counties must talk to the provider, the recipients, the assigned social worker and any other active providers to determine whether the exemption requirements are met.

Counties must document the justification for an Exemption 2 determination in CMIPS including the criteria evaluated, why the determination was made, the attempts made by the recipients to hire additional providers and why those attempts were not viable, and a description of the assistance provided by the county in attempting to identify an additional provider.

Recipients are not required to exhaust all options for hiring an additional provider.  Individuals are required to make reasonable attempts to hire additional providers.

The Exemption 2 policies are separate from and do not supersede any other IHSS program rules.  Although changes in need may impact the continued need for an overtime exemption, requests regarding IHSS needs should be evaluated using IHSS program rules.  For example, a request for reassessment should not be denied because there is an overtime exemption.  The receipient’s needs should be reevaluated, and then any impact on the overtime exemption should be determined.

For minor recipients with a parent provider, the county should first evaluate whether the parent is an eligible provider, and if so, then evaluate eligibility for an overtime exemption.

The provider can reapply for an Exemption 2 at any time.  However, to be reevaluated, there must be a change in the provider or recipient’s circumstances which has the potential to make a previously ineligible provider eligible for an overtime exemption. County staff should contact the individual within 10 days to determine the change in circumstances.

If the county determines that there has not been a significant change in circumstances, the county should not accept the application and should send a SOC 2325 form.

An Exemption 2 is terminated if the provider with an exemption is assigned to a new recipient’s case, terminated from the case of one of the recipients included in the exemption, or the recipient included in the exemption is terminated from IHSS.

Cases approved for an Exemption 2 should be reevaluated annually.  (ACL 19-100, October 29, 2019.)

Related

Posted in IHSS
Sours: http://reg.summaries.guide/2019/11/ihss-overtime-exceptions-for-extraordinary-circumstances/
IHSS During COVID-19

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January is a month that begins to bring up many questions regarding IHSS vs Taxes. Therefore, in the interest of answering the most asked questions in this regard, I am posting the basic information that is asked and continues to be asked repeatedly. Since 1/3/2014 it has been “mandatory” for ALL live-in providers to file their IHSS/WPCS income exempt from federal and state taxes. This is in accordance with the IRS Notice 2014-7.

1. If a provider and their recipient(s) reside in the same household, their IHSS/WPCS income is exempt from being taxed. This includes federal and state taxes.

2. If you are a spouse or a parent provider your IHSS/WPCS income is also exempt from paying Social Security, SSDI, FICA, Medicare. All other live-in providers do pay these additional taxes.

3. Complete IHSS form SOC 2298. This “IN-HOME SUPPORTIVE SERVICES (IHSS) PROGRAM AND WAIVER PERSONAL CARE SERVICES (WPCS) PROGRAM LIVE-IN SELF-CERTIFICATION FORM FOR FEDERAL AND STATE TAX WAGE EXCLUSION”. By completing and submitting this form you are certifying that the wages you receive for providing IHSS and/or WPCS services to the recipient named above will be excluded from your federal and state personal income taxes. Here is the link. The address to submit this form is provided on the form itself.
https://www.cdss.ca.gov/cdssweb/entres/forms/English/SOC2298.pdf

4. If federal or state taxes have been withheld from a live-in provider, you will receive a refund of said taxes when you file your 2018 taxes.

5. Since we do not know the length of time it takes for the IRS to process tax returns and to issue tax refunds please do not ask or compare your case with others. In the past several years, this has caused a flurry of threads on this subject much like questions regarding payroll and who has received their checks opposed to those who have not and those who are still waiting. It is suggested you begin a separate group as our group is to assist those especially new members in navigating the IHSS system, answer pertinent questions regarding IHSS services and most important IHSS policies.

6. If IHSS/WPCS is a providers SOLE SOURCE of INCOME, be aware the mandatory tax-exempt status does not allow for receiving EIC (Earned Income Credit). Many people in past years are or have been upset and disappointed they cannot receive EIC or child credits. The IRS Notice 2014-7 was implemented by the IRS, due to “the difficulty level of care” and it was “modeled” after rules regarding foster care. Please do not complain here about the lack of fairness this mandatory exemption causes as all live-in providers may be impacted .

We did not ask for nor did we lobby for this tax exemption. We have no role in the setting of IRS policies or their parameters.
If you have a spouse that is employed or if a provider has a job outside of IHSS, they may be able to claim EIC or child credits. This is something to discuss with your tax preparer.

7. Since the IRS Notice 2014-7 has been in force since 1/3/2014, most tax preparers are duly aware of it as is many of the tax programs that people use to complete their own tax forms. We do have knowledge that Jackson-Hewitt, H & R Block as well many private tax preparers are readily aware of and can provide the correct information to the IRS on your tax returns showing that federal and state taxes are exempt following the IRS Notice 2014-7 regulations.

8. In the event you need to provide evidence proving your IHSS/WPCS income is exempt from being taxed federal and state taxes, here is a link that was obtained from the state that details the IRS Notice 2014-7 and how it is applicable to the IHSS/WPCS programs. You can feel free to print this out and include it with your tax return. In the event you are later notified you “owe” taxes you can easily rectify the issue by sending a copy of this letter to the IRS. I among many others have done this and subsequently received a letter from the IRS accepting the proof and explanation that was given.

https://www.documentcloud.org/documents/2774755-IRS-Letter-About-Applicability-of-Notice-2014-7.html

9. Please keep in mind that everyone’s situation is different, no tow cases are identical. Because we are not tax professionals, therefore we encourage each provider to seek answers to their tax questions from a tax pro. We do not want to mislead anyone. Last year, I was notified that a couple of members followed incorrect information they were given within the group and they ended up owing taxes in addition to interest and penalties.

I hope this information will assist a you and will answer the basic questions you may have especially for those new to IHSS. It is our desire and our goal to provide accurate information.

Sours: https://m.facebook.com/groups/IHSSUnited/posts/January-is-a-month-that-begins-to-bring-up-many-questions-regarding-IHSS-vs-Taxes/1153602971475784/

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