Here's the IRS Q&A about IHSS
https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income
1st, you must submit the form SOC 2298 and be approved.
The recipient must be living with you or with them. If you are part time living with them per IRS it is taxable income and you do not meet the criteria. Because the provider maintains and has a separate home/tax home.
Note: be careful putting down you are Live-In when you're clearly not. These forms are usually sent my IHSS to recipient/provider they know lives with together like a child/parent.
If anyone fills out the form without checking with IHSS that can jeopardize the Recipients' benefits as they have them living separately or independently.
Here's the CA IHSS
https://www.cdss.ca.gov/Portals/9/FMUForms/Q-T/SOC2298.pdf
Also as of 2019 IHSS has stopped providing W2 to live-in provider so there's no need to make manual adjustments on "other income". If you continue to receive W2 and has Fed/SS/medicare/state withholding it's either you never met the criteria to begin with or you never filled out SOC2998 forms.
Make sure that in the original application you are living with them or they are living with you. If all of a sudden you say Provider/recipient lives together when the social worker does not have this info, that can raise issue with IHSS hours and guardianship all because you just want to save in taxes. Many are cheating and saying this which is why since 2019 those who meets the qualifications no longer receive W2 due to the blatant fraud.
Note: you can amend the tax returns if you meet the criteria considering the 3 year statute of limitations.
It's one thing to follow IRS regs, it's another rule for government benefits!
