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Is it legal tax wise and otherwise to hire a senior sitter or must you hire through an agency?

My mother is 87; I am 65 year old female (her oldest child and the one who lives closest; we both live in Alabama). She has been diagnosed with dementia. She still is otherwise healthy and keeps her home very clean and bathes and dresses herself. I am still working full time. Is it legal tax wise and otherwise to hire a "senior sitter" for several hours a day or must I go through an agency?
Status: Open    Mar 17, 2015 - 02:32 PM

Caregiving, Elder Law

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Aug 04, 2015 - 12:20 PM



You are not required to go through an agency to hire a sitter. However, if you hire the sitter, you need an employment contract and you need to withhold taxes as any employer must do. An agency handles employment issues and taxes for you. Additionally, an agency should have insurance in the event the sitter steals from your mother; or, otherwise causes damage. Further, an agency should be in a position to send an alternate sitter if your regular sitter is sick, taking time off, or on vacation. Finally, paying an agency raises fewer questions if you later need to apply for Medicaid for your mother. Ultimately, you may pick the sitter of your choice; but, the benefits from an agency can outweigh any extra costs.

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Jun 17, 2016 - 09:09 AM

Yes, it is legal to hire a senior sitter. However, you should avoid a "pay under the table" arrangement. If you hire a sitter, he or she will be considered your "employee." Therefore, you will be an employer. You should have a contractual agreement in place with the sitter, outlining the expectations and obligations on your part as the employer and the sitter's part as the employee. Moreover, you should ask your accountant about withholding federal and state taxes for your employee, just as any other employer would do. Finally, I would recommend seeing if you can add a rider onto your homeowner's policy to protect against liability in the event something should happen to the sitter while on the job.

Jun 19, 2016 - 06:45 AM

No, you do not need to go through an agency to hire a caregiver for your mother. However, you do need to comply with state and federal laws, which will include administering payroll, withholding taxes, and reporting them to the IRS. (Do not try and avoid this by classifying them as an “independent contractor”. The IRS considers this tax evasion.) You’ll want to contact your state employment department to learn about specific state regulations. Be sure to also have your employee caregiver fill out an Employment Eligibility Verification form I-9 and keep a record for your files. This form verifies that the person is legally entitled to work in the U.S. (download the form at www.irs.gov/Forms-&-Pubs ).

If you are paying for the care with Medicaid or insurance funds, you should also make sure the caregiver will be covered. Medicaid agencies, for instance, will typically require that the caregiver be registered with them. Finally, be sure to use a Caregiver Agreement (basically an employment contract for caregivers). This formalizes your employer-employee relationship, clarifies roles and responsibilities, and helps resolve issues that may arise down the road. All in all, hiring a private caregiver can give you more flexibility and often save you money, but it does come with added responsibilities.

(That being said, not all agencies do all of the above for you, so be sure to ask!)

Jun 27, 2016 - 07:59 AM

It is not illegal to hire a senior sitter. However, you face several issues if something goes wrong. Any amount given to them in a year over $600 will require you to issue a 1099 to them and the IRS. That person has to report it to the IRS, and pay taxes on it. If they don't, then you are liable for penalties and the unpaid taxes because you did not withhold.

Then, if the person gets hurt, they will claim that they were an employee and want to file a worker's comp claim.

Then, the person can claim unemployment; or that they were an employee and did not get proper time for breaks, lunches, and worked on weekends. The labor board in California is very anti employer.

It is best to go through an agency that does withholding, as they can also train a person and bond them.

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Mar 29, 2015 - 04:55 PM

There are some tax benefits for medical care involved but not companonship. A licensed agency will cost more but the caregiver should have training and usually a certificate. Paying in private could an issue especially if you don't know this person or good reference. With dementia there are times of hiding personal items and money , somewhat paranoia. They will forget, insist someone took it and it is hard for them to accept they have a problem. This may cause tension because your not sure what to believe. There are some dishonest people. Through agency this can be discussed, worked through or worse case ask for another provider.

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