@Hal_Al wrote:
If this income had been reported on a W-2, wouldn't FICA tax have been withheld? I think it is subject to FICA, even if it can be excluded for income tax.
Not in all situations. If the recipient is considered the employer, the employee is a Household Employee. As such, FICA does not apply to spouses, certain children or parents, or people paid less than the $2200-ish (or whatever the amount is now).
See Question #12, and the referenced other questions:
https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income
