My mother has a private caregiver who comes in a few days a week to sit with her. She is paid a fee each time by check from my mother's personal account. Any potential issues that she does not do any type of withholding that may in turn be due to the state. I feel that is the responsibility of the care giver to report money she makes. Another sibling feels that there could be repercussions for my mother. Any thoughts?
If payment is "under the table", and if your Mom later need to use Medicaid [which is different from Medicare], Medicaid may see those check payments as "gifts".
Also, please note, if one has a private caregiver who is not employed by an Agency, the homeowner would need to check with her home insurance carrier. She may need to have a "Workman's Comp" police in case her caregiver becomes hurt on the job.
You even have to send your attorney one if you pay more than 600.00 annually to them for services provided.
As for contracts, check with your State laws if minors who do lawn mowing can even sign a contract. And check with your home insurance to see if you are covered if a worker gets hurt on your property.
I have a guy [adult] who has been mowing my lawn for over a decade. He's an independent contractor. Thus, I don't do any payroll taxes, etc. and that is for him to take care of on his own. But I do have an "umbrella policy" insurance just in case he or anyone else doing work gets hurt. Those policies are affordable.
If there is no agreement in place if mom needs Medicaid within five years payment to caregiver will be thought to be a gift, making mom ineligible for Medicaid until five years has passed since last under the table was made.
This could easily jeopardize mom's Medicaid eligibility. Get it done legally to protect mom. Sibling is right.
state, it’s her employers responsibility. Your sibling is actually right about possible repercussions. Aside from the IRS catching wind that the caregiver is paid under the table, if your mother will need medicaid for long term care in the next few years, you will have a hard time explaining where the money went since there is no actual paper trail.