Notice 2014-7

[eaf1213]

A client takes care of a disabled adult in her home 3-4 days/nights a week. She is paid by Medicaid Waiver. The disabled adult requires 24 hour care and would be placed in a facility 3-4 days/nights a week if my client didn't take care of her. Her time is split evenly between living with her parents and then living with my client. Is the payments excludable from gross income for my client?

[George4Tacks]

See Q3 at https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income

[eaf1213]

She is actually taking care of her in her own home. So for 3-4 day/nights a week  the disabled adult lives in my clients home. My client does not go to anyones house. My client splits the supervision of the disabled adult with the individuals parents. If my client didn't take her in 3-4days/nights a week the individual would have to go to a facility for that time. 

[Ran]

Read this and you will have your answer:

Q3. I am an individual who cares for an unrelated elderly person five days a week in her home, and I have a room in the care recipient’s home where I sleep four nights a week. I receive Medicaid waiver payments for this care. On weekends and holidays, I reside with my family in our separate home. May I exclude these payments from gross income?

A3. No. In this situation, the provider works in the care recipient’s home, but the provider has a separate home where the provider resides and regularly performs the routines of the provider’s private life, such as shared meals and holidays with family. Therefore, the provider does not provide care for the care recipient in the provider’s home, and the provider may not exclude the Medicaid waiver payments from gross income.

[eaf1213]

The disabled individual lives in the providers home 3-4 days a week. The provider doesn't provide the care in someone eles home.