topic How much can i pay my parents without incurring any taxes? in Get your taxes done using TurboTax

How much can i pay my parents without incurring any taxes?

taxsavvy — Tue, 24 Feb 2026 06:59:59 GMT

My Mom moved in with us about a year ago and now helps with household chores. We are married with two kids, once of them younger than 18 year of age. My mom does about $1000 worth of household chores each month, if we would get them done from someone outside our home. I would like to have pay this amount to help her manage her expenses (Medical Insurance etc.). She has a Green card.

My question is, how much can i pay my mother for household work without having to incur any taxes for her and myself e.g. Medicare and Social Security taxes and Income tax. Can i pay her upto the deductible allowed which is $13,850.

Re: How much can i pay my parents without incurring any taxes?

NCperson — Thu, 06 Jul 2023 16:28:06 GMT

Re: How much can i pay my parents without incurring any taxes?

Opus 17 — Thu, 06 Jul 2023 16:41:49 GMT

If you pay someone who works in your home a wage for services performed, they are a household employee. This includes a maid, nanny, etc. If they work in your home according to your schedule, they are your employee, regardless of your relationship or where they live. Here is the tax guide for household employees.

https://www.irs.gov/publications/p926#en_US_2023_publink100086740

Generally, you are required to issue your household employees a W-2 if you pay more than $2,200. You are also required to pay household employee's tax on your tax return -- this covers social security tax, medicare tax, and unemployment tax for the employee. You are not required to pay household employees tax if the employee is your parent, unless the parent is providing child care services for a child under age 18 or a disabled older child. If your second child is old enough that they do not require child care services, then you can pay your mother any wage you like for household services and you do not have to pay household employee's tax. However, you must still issue a W-2.

In general, a single adult can earn up to the standard deduction and not pay federal income tax. The standard deduction for 2023 is $13,850 plus $1850 if over age 65. However, if your mother has other income, this may affect the calculation.

Because she is not subject to household employee's tax, she will not build credits in the social security system for disability or retirement. That may or may not be important, depending on her age and expectations of future work.

There is no reason you need to do this. As pointed out, this can just be family living together helping out with expenses. You get no benefit from paying a salary, and your mother doesn't really get any benefit from receiving a salary, unless she needs it to show eligibility for something legal (a loan, citizenship, insurance subsidies, etc.). Under some circumstances, creating a paid position for your mother who helps around the house just to have a W-2 could even be considered improper.

If you didn't pay your mother a salary, you might be able to consider her your dependent. That would result in a $500 tax credit for "other dependent" on your tax return. I can't tell you how it would affect her ability to obtain medical insurance, that's complicated and I haven't studied the issue. Your employer may allow you to add adult dependents such as a parent to your employer-sponsored health insurance, it would be worth asking.

Lastly, this does not consider state law. If your mother is your household employee, you might have requirements under state law to pay taxes, issue check stubs, or pay minimum wage. You would have to check with the laws of your particular state. And, the taxable income threshold might be different (higher or lower) in your state than for federal taxes.

Re: How much can i pay my parents without incurring any taxes?

Critter-3 — Fri, 07 Jul 2023 00:29:37 GMT

Personally I would call this a GIFT and you can give up to $17K per year per person without any tax liabilities.

Re: How much can i pay my parents without incurring any taxes?

NCperson — Fri, 07 Jul 2023 01:23:15 GMT

and since he states he is married ...$34K 😀

Re: How much can i pay my parents without incurring any taxes?

taxsavvy — Fri, 07 Jul 2023 14:26:23 GMT

Thanks for the response. Can the gift be counted as income towards insurance subsidies?

Re: How much can i pay my parents without incurring any taxes?

NCperson — Fri, 07 Jul 2023 15:07:17 GMT

@taxsavvy - no - it's a gift. it is not income.

Can you please explain about the the insurance subsidies?

Are you trying to get your mother medical insurance via the Marketplace? is that your real goal? the Marketplace won't subsidize the premiums of someone who is not working (those individuals are often eligible for Medicaid). I believe you can buy the insurance, but it won't be subsidized.

Re: How much can i pay my parents without incurring any taxes?

Opus 17 — Fri, 07 Jul 2023 15:15:31 GMT

@taxsavvy

If you are giving your mother a sham job in order to qualify for an insurance subsidy, that could be considered tax fraud. Make sure that she is performing legitimate work, that she is being paid a fair market wage for that work, and be sure you can document the performance of that work if you or she are audited. You may want to consult with a tax professional.