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CANHR Advocate Dear Advocate Articles

IHSS Provider for my mother…Is it true that I don’t have to pay income taxes on my salary?

Posted onAuthorKiara Lopez

Dear Advocate:

I’m an In Home Supportive Services (IHSS) provider for my mother, who moved into my home when I started to care for her. Is it true that I don’t have to pay income taxes on my salary?

Sincerely,
Cash-Strapped in Canoga Park

Dear Cash-Strapped,

Beginning in January 2014, the IRS issued a new rule that IHSS caregivers do not owe federal and state income taxes on their wages, so long as they live in the same home as the person getting the care. (Note: wages may still be subject to FICA tax.) Furthermore, if you received qualifying IHSS payments in the past, you can claim a tax refund within three years from the date you filed your tax return, or two years from the date the tax was paid, whichever was later.

Read more about IRS Rule 2014-7 here: http://www.irs.gov/Individuals/Certain-Medicaid-Waiver-Payments-May-Be-Excludable-From-Income