Friday, August 16, 2013

Caregiver Payroll Taxes - Issues For Adult Children With Aging Parents

When we got a caregiver for my mom, we talked to her accountant about what we'd have to do.  He offered to take care of the quarterly and year end reports.  We just had to send in what we paid for the quarter.  When he got our first quarterly report information, he contacted me to say that we had paid our caregiver gross and not net pay.  I guess that is something obvious to people regularly involved in this, but he hadn't explained that to me and I certainly wouldn't have known how to calculate the various taxes that needed to be deducted and he hadn't directed me to any way to do that.

If you tell someone to boil an egg, you probably assume they know they need a pot, some water, some heat, etc.  I guess the accountant thought he was telling me to boil an egg.

In any case, he did then suggest a company and an online payroll tax calculator.  I tried the online calculator, but it didn't have options I needed.  Like a daily, rather than an hourly wage rate.  I talked to a company representative, but they were really set up for doing a lot more than one or two employees and were much too expensive and suggested we look for a company that specializes in stuff more like we needed.

The accountant sent me another name.  I talked to him yesterday and he came by today.  I still need to get my mom's tax id number.  The accountant applied for it but he didn't get it in his office and thinks maybe it got sent to my mom.  But my mom and I have gone through most of the paper work that came to the house in the mail in the last month, and I haven't seen it.

I'm sure this isn't too difficult and if I could find a program for this I could do it myself, but being split between LA and Anchorage and my mom wanting some control over this, I just gave in and said ok, we'll do this.  Perhaps over time I'll be able to take it over myself, but for now I've had too many other new things to handle and having someone who will do it for me feels like a great relief.

I mention all this because when I've looked on websites for handling issues relating to taking care of seniors, I haven't found anything that got into the details of things like payroll taxes for caregivers.  I'm playing with the idea of another blog that goes into the experiences I'm having with my mom.  My family has said they don't want google to find out info about them on this blog, so I'm generally circumspect with names and photos and details about what they are doing.  And I don't really want to talk about my mom quite as publicly as this blog.  Another blog that's anonymous would work better. And the blog would just be dedicated to the aging and caring issues.

Before I do that though, I need to do more internet searching to see what all is already out there that I've missed. I need to use different search terms too.

Before posting this today, for example, I searched more specifically for "payroll taxes for caregiver for elderly"  and found information from Caregiver I needed four months ago, when I didn't know that I needed it or what I should be looking for.

"The Caregiver as Employer
By Jude Roberts, Staff Writer
(Page 1 of 2)
When hiring a professional in-home caregiver, there are a couple of ways in which they can be selected, either from an agency which specializes in screening and placing professional caregivers, or by doing the research, interviewing, screening, and hiring all on your own. Keep in mind that if you hire a professional caregiver on your own, you will be entirely responsible for paying certain types of taxes that may be new to you, as well as having to know which taxes your new employee should be paying as well. Although you’ve hired a professional caregiver, who is much more than just a “domestic housekeeper”, the IRS will recognize you as the employer of a domestic.

If you pay your professional caregiver more than $1400 in cash wages per calendar year (note: the IRS may change this amount annually), you will be expected to file payroll taxes on such things as: Social Security & Medicare taxes (7.65% of gross wages); Federal Unemployment Tax (FUTA) (0.8% of gross wages or less in most circumstances); state unemployment and disability insurance taxes levied on the employer; and advance payment of the earned income credit for eligible employees."
This was helpful in explaining to the caregiver why we had to do it this way (as advised by the accountant) instead of paying her as an independent contractor.

But I haven't found any really good general websites on aging parents that give good, comprehensive advice on things like this. That alerted me to issues I hadn't thought about but needed.  I'm sure they must be out there. 

For an example of how hit and miss this is, here are the top ten hits I got googling "elderly parents adult children" today:   [All these are brief excerpts, click links to get more.]

1.  Aging Parent offers a way for children caring for their parents to connect.  It offered
The Caregivers' Survival Guide:
Family Caring for Family
FREE when you sign-up for the Caregivers' Newsletter.
 It has a lot of options for different kinds of care for a parent - you can fill in your zip code and check off what you need and they come up with a list of providers in your area.  But I can't find the taxes information.  

2.  Time magazine story:

Caring for Aging Parents: Should There Be a Law?

China’s government thinks so, and as the population of elderly in nearly every society starts to swell, such eldercare laws are becoming more common. But are they effective?
2.  CBS Philly article:

"Survey Shows Adult Children None Too Anxious To Take Care Of Aging Parents 

June 4, 2013 11:49 AM

By Chelsea Karnash
PHILADELPHIA (CBS) – Think your kids will take care of you in your Golden Years? They might, but they won’t be happy about it. . . "

4.  Elder Law Answers

"Requiring Adult Children to Pay for Aging Parents

Did you know you could be responsible for your parents' unpaid bills? Twenty-nine states currently have laws making adult children responsible for their parents if their parents can't afford to take care of themselves. While these laws are rarely enforced, there has been speculation that states may begin dusting them off as a way to save on Medicaid expenses."
5.   Prairie River Home Care

Caregivers in St. Cloud, MN: Adult Children as Caregivers for Aging Parents

Of all individuals providing care to older adults, 42% of them are adult children. Most child caregivers are the daughters or daughters-in-law of the person receiving care. Throughout the passage of a person’s life, the care, comfort and assistance received are often given by one generation to other family members in a different generation. For example young children are cared for by parents and grandparents. When these children grow into middle adulthood, they may be taking care of their elderly parents.

6.  New York Daily News

China to require children to visit aging parents as elderly care poses problem for nation 

Rates of elderly will skyrocket, make up 35% of population by 2053. New law would require children to visit and care for their aging parents.

7.  The Family Firm offers:
Financial Tips for Adult Children of Elderly Parents

As our parents get older, family roles can shift in big ways.
Older parents can suddenly seem distressed by financial management, and taking it on can be overwhelming for adult children. Siblings need to cooperate, parents need to be willing to relinquish control, and everyone needs to communicate clearly — none of this is easy. . .
8.  A New York Times story:

"Adult Children, Aging Parents and the Law

Are children legally responsible for their parents’ care? (Susan Farley for The New York Times)
At the end of my mother’s life, for six months, a year at most, Medicaid paid for her care in a nursing home. She was broke by then, after living on a pittance since she was widowed at 58, using the proceeds from her house to pay for six years of assisted living and part of her nursing home stay and never seeing a penny from a long-term care insurance policy that cost a bundle but covered none of what she needed. She had given my brother and me no up-front money to hasten her eligibility for Medicaid and died with $26 to her name and nothing to leave to her children. The good news was we didn’t even have to put her will in probate."
9.   The International Business Times also has a story about the Chinese law requiring kids to care for their elderly parents.

10.  And finally, the University of Pennsylvania has an article
Bridging the Gap Between Adult Children and Their Aging Parents: Developing and Assessing a Life Review Education Program


  1. Bet Tzedek Legal Services has a caregiver companion that can be downloaded from their website. Each state has caregiver resource centers. Every county has an Area Agency on Aging that can provide a full menu of services available to seniors and their caregivers. WISE & Healthy Aging in Santa Monica has an information and referral line to connect folks to resources provided in house and throughout the community.

  2. aging parent careCaregiver Space. The work we do at The Caregiver Space stems from our commitment to ensuring caregivers feel seen, heard and most of all supported.

  3. Thanks to both of you for the information. We were at Wise and Healthy Aging earlier in the year and they had lots of information. Caregiver space looks like a good resource and I've signed up.

  4. Taxes are really quite another matter, eh? Just when computing payroll isn't enough of an issue already. One thing is for sure, though: we really can't afford to lose good accountants at this point. ;)

    David @ OmegaComp

  5. caregivers support groups - The Caregiver Space is a free social network that supports those providing Respite Care for Elderly, Caregiver Services, Dementia


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