Senior caregivers can either be hired as employees or independent contractors. The IRS is clamping down on improperly classified domestic workers. Therefore, you must have a clear understanding of the tax implications associated with hiring a senior caregiver as an employee or an independent contractor.
Hiring as an Independent Contractor
A senior caregiver is classified as an independent contractor only if:
- You can prove that the caregiver performs services that you have no control over
- The caregiver is a part of an independent business enterprise, such as a homecare agency, and has his or her own insurance
- The caregiver is providing services not required for the daily functioning of the household
If your senior caregiver doesn’t meet these criteria, he or she is an employee. You would be the caregiver’s employer and, therefore, be responsible for filing certain taxes.
Hiring as an Employee
Senior caregivers who are privately hired to take care of the daily needs of a geriatric patient are employees. These caregivers are also classified as employees when you pay them more than $2100 in a calendar year. You would be responsible for the caregiver’s employment taxes, record keeping, and insurance.
Other Factors to Consider
Hiring one of the nice ladies from your church or community group to take care of your loved one may seem like a good idea. However, the taxes to be filed can create a huge headache if not done correctly. The IRS won’t hold back on penalizing you. Some other important considerations include:
- The expertise of this caregiver. Trained geriatric caregivers possess certain skills that the average person doesn’t. You risk having your loved one receive inadequate care if you don’t hire the right person.
- Improper supervision and management. Who is going to consistently monitor what this person is doing with your loved one? You don’t have the time to supervise.
- Liability if anything happens to the person on the job. You will either must get specific insurance to cover this employee or pay the full medical costs if anything happens to this person on the job. The likelihood of something happening is great so this expense is inevitable.
- Being at a loss if the person quits. An independent contractor can quit unexpectedly leaving you with no one to care for your loved one. A home care agency would be able to find a replacement from its pool of workers.
Hiring an independent caregiver to care for your oved one is risky. It’s best to hire a caregiver through a homecare agency. Own a Home care Agency can connect you with top homecare providers in your area. Give us a call and we’ll make the link.