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"If the caregiver employee is a family member, the employer may not owe employment taxes even though the employer needs to report the caregiver's compensation on a Form W-2. See Publication 926, Household Employer's Tax Guide for more information. However, in some cases the caregivers are not employees. In such cases, the caregiver must still report the compensation as income of his or her Form 1040 or 1040-SR, and may be required to pay self-employment tax depending on the facts and circumstances."
- Family Caregivers and Self-Employment Tax. IRS.GOV

Ayup, an elder law attorney is needed to decipher things.
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If done improperly, mom could be subject to penalty equal to the amount she pays you.

Rules for caregivers do not vary by state. Caregivers are employees, period, as determined by the IRS.

Here is a good place to start
https://www.irs.gov/newsroom/tax-situations-when-taking-care-of-a-family-member

See an elder law attorney for preparation of a caregiver agreement. Keep in mind, this care must be medically necessary.
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Generally:
as a contractor, I take care of my taxes, my health care, my withholding... The employer and I need to keep records in case the IRS decides to audit.
as an employee, the employer must deal with taxes, withholding, insurance... Of course, we should both keep records in case of an IRS audit.

Each state has different requirements. Your best bet is to schedule time with a lawyer that deals with elder law. Ask him/her to write up the contract once you get his/her advice - which will be better than anyone from this board.
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Keep it simple
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In my state (MN) a caregiver is NEVER considered an independent contractor by the IRS. You should consult with an elder law attorney to get the best guidance specific for your state and understand what your legal options may be. It will be very very important to protect her ability to qualify for Medicaid (even if you think she may never need it) and much an go awry if you don't handle this scenario properly in a legal way specific for her state.

Here is a helpful article from this website:
https://www.agingcare.com/articles/how-to-get-paid-for-being-a-caregiver-135476.htm
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tomsfc Sep 2021
Thanks, I found the articles helpful.
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From what I am beginning to learn and I say “beginning” is it varies by state and should have a contract written up by an attorney that you and your loved one decide on your pay.
i am just in the beginning parts of attempting to figure this out. It would be best to speak with an elder law attorney and let them advise you the best way to do it.
Some here have said that you are considered and employee of your loved one (meaning your loved one has to pay and match additional payroll taxes etc).

So my best advice is to speak with an elder law who can tell you the best way to go about this.
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tomsfc Sep 2021
Thanks. I am in California. Let me know what you find.
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I would think making Mom an employer would lead to a bunch of tax stuff she'd have to contend with...
As an independent contractor, with a contract for services, only you would have to deal with the tax and recordkeeping stuff that comes with being self-employed.
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gladimhere Sep 2021
IRS requires home care workers be employees. This has been determined over and over again.
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