Today TaxMama® hears from KP in the TaxQuips Forum, with this question.  “My sister-in-law received a 1099-Misc with an amount in box 6 for medical health care payments for providing care for her husband, a veteran receiving VA benefits. I know the amount is taxable to the federal government, but is it subject to social security tax?”

 

                                                                          

Dear KP and Family,

After answering the question, I got this interesting note from a friend at the IRS:

He pointed to this article about payments coming from  “a state, a political subdivision of a state, or a certified Medicaid provider under a Medicaid waiver program to an individual care provider for nonmedical support services provided under a plan of care to an individual (whether related or unrelated) living in the individual care provider’s home.”
These payments might not be taxable at all !!!

This might apply to many people.

And remember, you can find answers to all kinds of questions about earnings, 1099s and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

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Comments1
  1. cpamemApril 28, 2014   

    Interesting that it might not be subject to income tax, but it doesn’t answer the question of whether or not it is subject to social security taxes. Even the Notice 2014-7 says it does not address FICA taxes.

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