Tax Exemption

Caretaker Personal Income Tax Exemption

  • Pays more than 50 percent of support of a relative and a relative had gross income for the year less than the personal exemption amount [and has not filed a joint return with his or her spouse]                                                                               
  • Person paying the support may claim the relative as a dependent on the person's federal income tax return

Employer of Outside Care Providers
Pay Social Security and Medicare Part A taxes
  • imposed on all employers and employees on cash wages in excess of the threshold in any calendar year                                       
  • Social Security Old Age, Survivors, and Disability Insurance (OASDI) taxes are limited to the Social Security wage base        
  • no limit for the imposition of the tax for Medicare Part A.