Notice 2014-7, which was issued by the IRS, explains that, as of January 3, 2014, the IRS will treat certain Medicaid waiver payments as difficulty of care payments excludable from gross income under section 131 of the Internal Revenue Code. This treatment applies, regardless of the individual care provider’s relationship to the person receiving the care, as long as:
- the individual care provider has the same home as the eligible person receiving care AND to the extent that
- the number of qualified individuals being cared for is not more than 10, if the qualified individuals are age 18 and under OR
- the number of qualified individuals being cared for is not more than 5, if the qualified individuals are age 19 or over.
Since you do not claim the income as taxable and there is no withholding, you would not receive a refund.
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