Tax Implications of Hiring Caregivers Privately

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Tax Obligations for Private Hire Caregivers

When hiring a caregiver for an aging parent or loved one, families are often focused on the skills of the caregiver, his or her work experience, personality and availability. What most people rarely think about are the tax obligations of hiring a private caregiver privately.

Families who do not hire a caregiver through one of the local Jefferson County home care agencies will not have to go through the lengthy, and sometimes complicated process of filing caregiver taxes. However, those who do opt to hire caregivers privately must be sure to file tax information properly to avoid being penalized by the IRS for tax evasion, amidst other fines or punishments. Read on for more information about the tax implications of hiring caregivers privately.

Determine If You are a Household Employer

According to the IRS, you must file taxes if the person you hired performs work that you control. In the case of caregiving, caregivers receive instruction from you (the employer) in terms of what work is done and how that work is done. Therefore, you are involved in an employer-employee relationship that automatically requires you to remit Medicare, Social Security and applicable state and employment taxes on behalf of the private caregiver.

Monitor Your Caregiver’s Gross Earnings

As the employer, the IRS will expect that you keep records showing periodic payments made to your caregiver. These records must be presented to the IRS during quarterly and annual tax filings along with calculations for taxes withheld for each payment. U.S tax laws for caregivers stipulate that employers should withold taxes for total quartely payments that are above $1,000. In addition, you are responsible for withholding taxes if your caregiver’s pay for hourly or live-in home care in Jefferson County exceeds $1,800 in a year.

Provide Your Caregiver with Relevant Tax Forms

You will need to provide your caregiver with Form 1-9, Employment Eligibility Verification, which verifies that the caregiver is legally authorized to work in the United States. The responbility of submitting correctly filled tax withholding forms, social security numbers, and other relevant documentantion falls on the employer. You will be commiting a felony if you attempt to evade employee taxes payment by presenting the IRS with Form 1099 to represent your caregiver as a private contractor rather than an employee.

If you have not yet hired a caregiver privately, and you are concerned about possible legal requirements such as filing taxes and providing workers’ compensation, learn more about trusted caregivers from home care agencies like Home Care Assistance of Jefferson County. All of our in-home caregivers are highly trained, bonded, licensed and insured, and we take care of all caregiver taxes, because you should be spending time with your loved ones, not stressing over unnecessary paperwork.

To learn more about our in-home caregivers or to schedule a complimentary, no-obligation consultation, visit our website at or call us directly at 303-987-5992.


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