Families are often concerned about the costs involved in hiring a caregiver through an in-home care agency, and look to other resources such as finding private caregivers to provide care for their loved one. Understandably, cost is a factor in decision-making. However, what most families do not realize are the hidden costs and responsibilities they now bear as a result of hiring a private caregiver. It is important in the decision-making process to understand the following when considering the hiring of a private caregiver versus hiring one through an in-home care agency.
1. You are the caregiver's employer. The IRS will expect you to withhold and pay Federal employment taxes.
2. The government will require you to do the following. If not done, it will be considered “illegal hiring”:
- Obtain a Federal Employer Identification number form the IRS.
Pay State Unemployment Tax contributions and Workers Compensation insurance
- A schedule H (Household Employer Taxes) must be attached to your Federal Income Tax Return (Form 1040).
- Provide a W-2 (Wage and Tax Statement) to the caregiver at the end of the year.
Form W-3 (Transmittal of Wage and Tax Statements) must be filed with the
- Verify Form I-9 (Employment Eligibility Verification) to establish that the caregiver is legally allowed to work.
3. You will be responsible to schedule a reliever. The caregiver will need schedule days off and be provided with relief days off for last minute emergencies.
4. Should you decide to lay off your caregiver, he or she can go to the state unemployment office and file a claim for unemployment benefits. You will then be liable to pay penalties to the IRS.
5. Should you hire a caregiver who has unknown identity, character, and/or immigration status, you will have little recourse should there be theft, abuse, or other issues requiring legal action. You are responsible for all of the background checks.
6. An untrained, inexperienced caregiver increases the risk factor of something counterproductive happening to your parent.
7. Should your caregiver be injured on the job, they may place a claim with Worker’s Compensation. It’s a felony not to have this coverage as an employer in California.
In reality, taking all things into consideration, it is a wise decision to consider the services of an in-home care agency. I hope this has been a helpful and educational piece of information for you. As always, I'm here to answer questions and
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