HOUSEHOLD HELP

[TAXMAN]

TP 22 took care of disabled grand dad in grand dad's house for 2 months. Because Medicaid required a spend down in order to qualify for benefits granddad paid 4000.00 to TP.  Grand dad does not otherwise have to file. TP has other w-2 income and will have to file. Question is what to do with TP's 4K. Can't treat it as gift as Medicaid will make them pick it back up. TP should not be self employed. I guess the only option is for Granddad to file sch H and pay ss and mt. How would you proceed on this?

[DANRVAN]

"Granddad to file sch H"

 

That appears to follow the fact pattern.

[Terry D EA]

3 hours ago, DANRVAN said:

"Granddad to file sch H"

 

That appears to follow the fact pattern.

I agree.

Be careful with the Medicaid rules. Because the TP is a family member, Medicaid may call this an improper transaction and disallow coverage. I'm not sure on this but after caring for my mother for a few years and dealing with Medicaid, I wouldn't take any chances. The folks I dealt with in Ohio couldn't even add and could never get my patient responsibility correct. Very simple math, mom gets x dollars and you're allow to keep 50 dollars for personal care. Maybe it was because I was using normal math and they were using common core??? I was threatened with fines for failure to properly pay and accused of improper transactions because I did the spend down exactly as they directed me to. After one year and a couple of months they finally figured it out. Great!!!. Not so fast, somehow I overpaid. I paid the same amount every month for three years. The nursing home bookkeeper couldn't figure anything out and told me to quit asking cause she had no answers. It really became a joke after a while. That overpayment was applied to her funeral as Medicaid insisted it was right. My best suggestion to your client is keep every document from Medicaid and don't discard anything. Keeping the docs was my saving grace. 

[DANRVAN]

2 hours ago, Terry D EA said:

Be careful with the Medicaid rules. Because the TP is a family member, Medicaid may call this an improper transaction and disallow coverage

I would never give out advice on MC rules, but  I "think" a family member is allowed to be caregiver if through an "arms-length" transaction.

[Lee B]

16 minutes ago, DANRVAN said:

I would never give out advice on MC rules, but  I "think" a family member is allowed to be caregiver if through an "arms-length" transaction.

Yes the Medicaid 5 year look back rules vary from state to state.

[schirallicpa]

Medicaid is a college class of it's own.   Sometimes family members can receive money tax free as a care-giver, but be careful how that contract is written.  The money has already been paid with little forethought so - hey - let us know.  I'm at that wonderful stage right now where my mother with dementia has given away loads of money that Medicaid is not happy about it. But I don't think Joel Olsteen is going to be writing a check back to the nursing home now.  I'm a little late getting the power of attorney that I needed months ago, partly my own fault because I was not realizing how wacky she had gotten.  Not exactly close to her, and certainly not happy trying to figure out what she's done with all her money.

[Lee B]

I sympathize, when we moved my mother in law in to live with us her dementia was causing problems.

She couldn't remember whether she had taken her prescriptions.

She had stopped paying her bills and the city was getting ready to turn off her water.