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Difficulty of Care Income

hjsteele06 — Mon, 09 Mar 2026 05:58:31 GMT

We get difficulty of care payments but do not receive a 1099 or W-2 since it is tax exempt. Do I report the income and if so where?

Re: Difficulty of Care Income

ColeenD3 — Wed, 16 Feb 2022 16:23:13 GMT

No, you do not have to report it. Many people do receive the reporting forms and then have to jump through hoops to turn around and exclude the income.

Re: Difficulty of Care Income

Bsch4477 — Wed, 16 Feb 2022 16:23:21 GMT

You don’t have to report it but since it is considered earned income it might benefit you by qualifying you for benefits like earned income credit or IRA contribution eligibility. If those are possible for you, you should ask for payment documentation.

Re: Difficulty of Care Income

hjsteele06 — Wed, 16 Feb 2022 17:08:43 GMT

We have a household employee to help us be able to provide the care that the 3 boys require and that is where the issue comes in. It looks like we don't make enough "claimed" income to pay her when obviously we do.

Re: Difficulty of Care Income

PattiF — Wed, 16 Feb 2022 17:56:13 GMT

As ColeenD3 said above, you do not need to use the Difficulty of Care income in your tax return as it is Excluded income.

This IRS Notice discusses the exclusion.