![]() For example, consider the situation where a caregiver ruptures a disc while lifting a person with a disability. In general, a homeowner’s insurance policy does not cover a caregiver for an employment related personal injury. If the caregiver sustains a work-related injury, then there may be liability on the part of the employer, homeowner, and person with the disability. In some states, the failure to provide workers’ compensation coverage is a criminal offense. )įurthermore, if the caregiver is an employee and not an independent contractor, state law may require that the caregiver be covered under workers’ compensation. Internal Revenue Service Publication 926 contains contact information for the states. To determine whether the employer must register and pay state unemployment tax for a caregiver, the employer can contact the appropriate state taxing authority. If the caregiver is classified as an employee, then the employer must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay state and federal unemployment taxes on the wages paid to the caregiver. In addition, the classification affects the worker’s eligibility for employer Social Security contributions and Medicare benefits. The classification as an independent contractor or employee affects how the federal income tax, Social Security, and Medicare taxes are paid, and how caregivers file their income tax returns. Before the employer can know how to treat payments made to the caregiver, the employer must make a critical determination as to whether the caregiver is an independent contractor or an employee.įor federal tax purposes, there is an important distinction between an independent contractor and an employee. The first matter to address is the classification of the caregiver as an employee or an independent contractor for income tax purposes. Besides the practical considerations such as the caregiver’s competency and background, there are many legal pitfalls in caregiver employment. This applies to any prospective employer of the caregiver, whether the employer is a family member or a trustee who will pay the caregiver from a special needs trust. He limits his practice to asset protection, life care planning and estate and tax planning.Ī person hiring a caregiver must exercise care in the hiring and paying of the caregiver. ![]() Pete is a charter member of the Life Care Planning Law Firms Association and a member of the Society of Louisiana CPAs. ![]() Holding both a law degree and LLM in tax, Pete is certified as an elder law attorney by the National Elder Law Foundation and as a Tax Specialist and Estate Planning and Administration Specialist by the Louisiana Board. Losavio, Jr., CELA, an attorney with Losavio & DeJean, LLC in Baton Rouge, Louisiana. The Voice is the email newsletter of The Special Needs Alliance.
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