"Q12. I receive payments that are excludable from gross income under Notice 2014-7. Are the payments subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA)?
A12. Maybe. Whether the payments are subject to social security and Medicare taxes depends on whether you are an employee of the agency, an employee of the individual care recipient, or an independent contractor. If the agency is your employer, the payments are subject to social security and Medicare taxes. See Q&A 18 under Agency Questions. If the care recipient is your employer and these payments are wages for that employment, the payments are subject to social security and Medicare taxes unless one of the exceptions for domestic services applies. See Q&A 19 under Agency Questions. If you are an independent contractor, the payments are not subject to social security and Medicare taxes. See Q&As 13 and 14."
Reference: https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income
