I am trying to understand whether this is a shady practice or just OK as it is within the realms of the current IRS law (IRS pub 926). My mother who is diagnosed with rare cancer is moving to US as a lawful resident. Now I am trying to figure out how can I get her medical insurance so she can get care in US. I live in WA state where there is a five year bar for new lawful resident to get medicaid (Apple Health).
So then how about this, I do expect my mom to live with me, also help in housekeeping and cooking etc. Then why don't I pay here about $20000 annually. This will kick her annual earning just above federal poverty level and qualify her for low cost insurance via premium tax credits through the Insurance Marketplace.
This is borderline shady as she will end up paying say $2000-$2500 in federal tax with no social sec tax and medicare tax as I am married with no kids (per IRS pub 926). But she will end up getting $11,000 give or take in premium tax credits.
She will live at the same place as mine, She may choose to contribute from her salary in living expenses of the same household I am in too. Is this legal or shady ?
