I'm IHSS provider, no live-in, who pays federal and CA state income taxes and report it to Fed and CA.I was told that CA treats IHSS differently.Please explain.

[Anonymous]

Turbotax suggested to add IHSS income to CA as CA treats it differently. I already reported IHSS income to FED and CA, and would like to know how it affects me and what does it mean.Thanks!

[DawnC0 · Accepted solution]

Since the recipient of the services you provide does not live with you, you are not eligible to exclude your income from federal or state (CA) income taxes.  If your living arrangements change, you can fill out a self-certification form (SOC 2298) and your wages will be excluded.   

The wages are excluded to recipients who live with the person receiving the care.  The following information is from the  California Department of Social Services - http://www.cdss.ca.gov/inforesources/IHSS/Live-in-provider-self-certification

California conforms to IRC section 131 under Revenue and Taxation Code (R&TC) section 17131, so it follows IRS guidance, including IRS notices, concerning the provision. As such, IHSS difficulty of care payments made to an individual living with the person for whom he or she provides care will be excludable in California. 

In Home Support Services - FTB 

[noemiflores7272]

Therefore since i do live with the person i provide care for (my sister) . I Can NOT get child tax credit (CTC) for my 6 year old son ?

[katerenee]

I also have a question regarding this. I will recieve a W-2 to file since im a caregiver that does not live with my recipient? Because taxes get taken out of my checks but I cant find any article about non live in caregivers

[Krystal111]

Hi iam a IHSS provider for my mother I don’t live with her and when I filed taxes it’s saying I don’t qualify for the child tax credit. Can you explain why but? 

[JamesG1]

I believe that you are saying that you would like to be claimed as a dependent qualifying for the Child Tax Credit on your mother’s Federal tax return.

Or, perhaps you are saying that you have a dependent and you would like that dependent to qualify for the Child Tax Credit on your own Federal tax return.

In either case, to qualify for the Child Tax Credit, the child must fit all of these requirements:

• Be under age 17 at the end of the tax year.
• Is your son, daughter, stepchild, foster child, adopted child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them (for example, a grandchild, niece, or nephew).
• Has his or her own Social Security Number.
• Children with ITINs don't qualify, but may instead be eligible for the $500 Credit for Other Dependents.
• Lived with you for more than half the year.
• Didn't support him/herself (didn't pay more than half their own expenses).
• Is a U.S. citizen, U.S. national, or U.S. resident alien.
• Residents of Canada or Mexico wouldn't qualify.

See also this TurboTax Help.

[Rebsgirl]

Follwing up on the answer provided:  i too do not live with any of my clients but they still dont take amy fed or state taxes...why? I dont know...so do i still have to file

[Rebsgirl]

I have the same problem

[MarilynG1]

@Rebsgirl  If you don't live with the person you care for, it is considered taxable income for both Federal and California. You don't have to make any separate entry for California, just enter your W-2 in the Wages & Income section in your Federal return. 

Click this link for more info from the California FTB.

Since this is taxable income, you could contact the Payer and ask them to withhold taxes for you going forward. 

[Redranger]

You usually have to mail in a W4 form to IHSS payroll. If they don’t receive a completed W4 they won’t deduct the taxes.

[tonyzg97]

So, my question is: My mother is a provider for my brother they live together and she just recently received a letter from SSN saying that since 12/1/2021 she has not been paying her federal or state taxes.. she contacted IHSS and they told her they stopped paying these taxes because they are not obligated to this any longer, that won't be able to file taxes anymore. Has anybody here gone through a similar situation?

Thanks!

[Redranger]

I’m a live-in provider for my father in California. I had to complete an online certification in the IHSS portal to certify we’re in the same home and after this IHSS stopped deducting taxes. At the end of the year I still receive a W-2 from IHSS and file it with my tax return even though the tax boxes do not have any amounts. This hasn’t been an issue for me so far.

[tonyzg97]

Thank you for your response! I will advise my mother about your situation. What intrigues me is why they didn't do this years ago. My mother has been my brother's caregiver for the past 15 years. I am wondering if this is  just a new law...

[619DevSD1]

I have a similar question but the situation is the same. I take care of my mother but don't live with her, wanted to file my taxes but it's saying that I OWE money even though federal taxes are being taken from my checks. Why and how do I fix this?

[KrisD15]

Perhaps they are taking out taxes, but NOT ENOUGH taxes which results in you owing.

You can ask them to take more tax out of your checks or put money aside for next year's tax.