VA Surviving spouse benefits

6 replies
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My mother receives VA surviving spouse aid and attendance. Her daughter cares for her and lives with her. If the daughter is paid does the daughter pay taxes on the money received? If so, what paperwork should my mother be giving her (W2)?

DaveF1006Answer

Alumni - Intuit

Expert Reviewed

Yes, the daughter is obligated to report the income and pay taxes on it. There are two ways to report this income.

Assuming your mother is paying your daughter, she could prepare a W2 but this is a complicated process that shouldn't be pursued. because of the payroll taxes involved with the process.
The daughter could report this as self-employment income (even though this isn't technically a business) and pay all income and self-employment taxes.

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Anonymous_

Level 15

I will page @Mike9241. Stay tuned.

DaveF1006Answer

Alumni - Intuit

Expert Reviewed

Yes, the daughter is obligated to report the income and pay taxes on it. There are two ways to report this income.

Assuming your mother is paying your daughter, she could prepare a W2 but this is a complicated process that shouldn't be pursued. because of the payroll taxes involved with the process.
The daughter could report this as self-employment income (even though this isn't technically a business) and pay all income and self-employment taxes.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

ee-ea

Alumni - Champ

Veterans' benefits.

https://www.irs.gov/publications/p525#en_US_2022_publink1000229272

Don’t include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the Department of Veterans Affairs (VA). Amounts paid to veterans or their families aren't taxable.

Anonymous

Correct, VA benefits are not taxable to the recipient. The daughter isn't the recipient here, she's a paid caregiver and her income from caregiving is taxable income to her.

@ee-ea