Benefits
Major Boost to Tax Credits for In-Home Employment
Most families will see their tax breaks for care-related expenses at least double and some will see them at least triple, and find it significantly cheaper to pay legally – and take advantage of the tax breaks – than to pay under the table.
Mar. 24, 2021
Common Myths About Household Employment – And Helpful Tips for Tax Professionals
Over the past few years, we’ve seen a significant trend toward in-home care – for both children and aging seniors. The COVID-19 pandemic accelerated this trend dramatically as families faced facility closures and sought viable care options that would limit exposure of the virus to them and their loved ones.
Concurrently, two other important factors have come into play. First, the 2020 crisis made families and caregivers realize that most of the safety nets for caregivers are funded by the payroll system.
In addition to long-term protections like Social Security and Medicare, short-term benefits like unemployment, paid sick Leave and even stimulus checks are only available to those with reported wages. For decades, domestic employment has been plagued by unreported wages, but employees and employers had an awakening amid the crisis.
Continue reading to see how the American Rescue Plan Act significantly boosted tax credits for home health care and nanny taxes, plus 5 helpful tips and myths.