@kamaaina1 wrote:
More info:
IRS Notice 2014-7, Difficulty of Care Payments Excludable from Income
If you are an Individual Provider who lives with your client, the income you earn for providing care services can be excluded from your federal income taxes.
Individual Providers are eligible for the Difficulty of Care income exclusion if the Provider lives with the DSHS client in the same household. This means that the wages earned by an IP for providing personal care to a DSHS client who they live with are excluded from the IP’s income for income tax purposes.
The Difficulty of Care income exclusion applies only to personal care services and relief care,[1] which are listed separately on year end W2 earning statements. The exclusion does not apply to payments made for respite care[2], skills acquisition training, travel time, required trainings, or paid time off. The exclusion does not apply to payments you receive directly from your clients, which are known as “client participation” amounts.
If you qualify then you simply do not enter the income at all since it is "excluded".
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
