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Thread: Work comp attendant care payments, taxation

  1. #1

    Work comp attendant care payments, taxation

    Does anyone have knowledge/experience with worker?s comp and attendant care payments, particularly when the caregiver is the spouse, and how these payments may be taxed?

    My husband and I had multiple issues with agency caregivers and I was providing the majority of his care post-discharge from the rehab hospital already, so I requested that the work comp insurance company cancel the contract with the agency and that they pay me for assisting my husband instead. Although they are not paying me directly, an additional check from work comp is now being issued to my husband every 4 weeks, which is listed as medical payment/attendant care.

    The issue is this: I?m uncertain as to whether this type of payment is considered taxable income, or if it might be tax-exempt as part of his work comp benefits.

    I had asked the work comp attorney about this, but as tax law isn?t his area of expertise, he recommended I speak to a tax lawyer or CPA. So I met with a CPA and also showed him the following info I had found while searching for information myself, where Q&A 1 seems to fit our circumstances most closely:

    https://www.irs.gov/businesses/small...employment-tax

    However, there are a few distinctions which may be important.

    One is that the example given does not indicate whether or not this rule also applies for attendant care that is paid under work comp specifically. My understanding is that work comp payments such as wage loss benefits and settlements are tax-exempt, but I don?t know if attendant care payments would be considered a work comp benefit also, and therefore non-taxable, or if they are considered income.

    I have also just been made aware that we will not be receiving a 1099-MISC from the insurance company. I specifically asked the claims specialist if/when we should expect such a document for tax purposes and was told, ?These payments are not tax reportable.? She is neither a CPA or lawyer though, so I?m not certain this is correct. In our situation the amount is paid to my husband and I am the individual performing the necessary care. So I question whether or not it would be considered ?income received for work performed? for me, and needed to be filed as such on our joint return, using the first example from the IRS link.

    I thought I?d ask here while seeking a tax lawyer who may have more knowledge in the matter, in case anyone has relevant experience.

    Thanks for any insight.

  2. #2
    Workers Comp is different in every state. Unable to comment without knowing where you are.

    (KLD)
    The SCI-Nurses are advanced practice nurses specializing in SCI/D care. They are available to answer questions, provide education, and make suggestions which you should always discuss with your physician/primary health care provider before implementing. Medical diagnosis is not provided, nor do the SCI-Nurses provide nursing or medical care through their responses on the CareCure forums.

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