Caregiver Agreements

When working with caregiver agreements, it is important to remember the tax implications.  This link takes you to the IRS guide for wages paid in 2011.

If you pay a household worker $1,700 or more in cash wages during 2011, you must deduct Social Security and Medicare taxes and report the wages once a year. This includes reporting any cash you pay to cover the cost of the employee’s transportation, meals or housing. If you do not report the wages on time, you may have to pay a penalty in addition to the overdue taxes.

http://www.irs.gov/pub/irs-pdf/p926.pdf

A person hiring a caregiver must exercise care in the hiring and paying of the caregiver. This applies to any prospective employer of the caregiver, whether the employer is a family member or a trustee who will pay the caregiver from a special needs trust. Besides the practical considerations such as the caregiver's competency and background, there are many legal pitfalls in caregiver employment.

Full article at Special Needs Alliance, http://www.specialneedsalliance.org/the-voice/5/5.