Tax Exemption Information for Caregivers

As a caregiver for an individual with intellectual and developmental disabilities (I/DD), you play a vital role in providing support and care.  Recognizing this, the IRS offers a Difficulty of Care Tax Exemption (IRS Notice 2014-7) which may allow certain payments to be excluded from your income, reducing your tax liability.

Eligibility Criteria:

• You must be providing care in your home to an individual with I/DD that lives with you.
• The care must meet the qualifying criteria as outlined by the IRS.

Please Note:  This exemption is specific to the tax treatment of certain payments and may not apply to all situations.  It is important to understand the guidelines and how they relate to your circumstances.  Read the IRS 2014-7 Notice for a complete understanding of your eligibility and the process of claiming this exemption; we highly recommend consulting with a tax professional with any questions.

Important Tax Implication Notice:

Please be aware that if you do not qualify for the Difficulty of Care Tax Exemption, or if any part of your payments do not meet the exemption criteria, you will be responsible for reporting this as income and paying any applicable taxes.  It is essential to accurately assess your eligibility, as failing to report income could result in owing back taxes, interest, and penalties at the end of the year.  We strongly recommend that you consult with a tax professional to understand your full tax responsibilities and to ensure that you are in compliance with tax laws.

Ready to Apply?

If you meet the criteria and wish to proceed, please fill out the form below.  Remember, by applying, you affirm that:

• You are a caregiver to an I/DD individual that resides in your home.
• You acknowledge your responsibility to report your income and consult a tax professional for your tax obligations.

Fill out the form below & if all looks good, we'll get you set up as exempt from tax withholdings on your paychecks.