Difficulty of Care Payments and Shared Living Guidance
If you are a parent/caregiver receiving Medicaid waiver payments (e.g., Home and Community-Based Services (HCBS)) for providing care to your loved one with a disability in your home, you may be able to exclude these payments from gross income on your tax return.
Click here to read the brief from The Colorado Department of Health Care Policy and Financing which provides information regarding Internal Revenue Bulletin 2014-4, Notice 2014-7 as it relates to Host Homes and other shared living settings. The brief includes a link at the end that will help you figure out if this exclusion applies to the payments you receive and it will also help you figure out how to handle the exclusion on your tax return.
Please also visit the IRS website for answers to many questions that are not answered in Notice 2014-7. Click here to read “Certain Medicaid Waiver Payments May Be Excludable From Income”. The IRS is directing that past tax years are still open and may be amended. This document provides guidance on claiming a credit or refund. We learned of this information through Janet, a long-time member of our chapter who has a daughter with a disability. We want to thank her and encourage you to share this kind of information with us. If it’s a big deal for you, it’s probably a big deal for other parents and we want to help spread the word.
Please review all referenced documents with a certified tax professional and call the numbers provided in the briefs if you have further questions. The advocates at The Arc Arapahoe & Douglas Counties are not qualified to provide tax guidance. We hope this information will help you this tax season.