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Question

Can a person earn social security credits by being paid by elderly parents to care for them? Examples would be driving the elderly parents to doctors' appointments and to the store and also cooking for them. Any idea of a reasonable rate for such services? The concerned person is already doing this effort for free but needs a few more Social Security credits and has difficulty holding a job at this time because of the many obligations to the parents. Clearly social security taxes would be paid on the earnings paid by the parents. Thank you for any advice provided.

Submitted: 83 days and 7 hours ago.
Category: Tax
Value: $28
Status: CLOSED
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Optional Information

State/Country relating to Question: Minnesota

Posted by Milan Vaishnav 83 days and 7 hours ago.

Answer

Dear Friend,

 

Yes, a person canearnsocial seciruty credits by being paid by elderly parents to take care of them. If you're one of more than 70 million people who provide unpaid caregiving for a family member or friend -- either in that person's home or in your own -- you know that the time and energy burden can be enormous. In fact, you may have cut back or given up your paying job.

 

Here's how: If the parent, spouse, or other person you're caring for is eligible for Medicaid, its Cash and Counseling program, available in some states, can provide direct payments that could go to you. A few other states have similar programs for low-income seniors, even if the person receiving care doesn't quite qualify for Medicaid. Also, if the person you're caring for has long-term care insurance that includes in-home care coverage, in some cases those benefits can be used to pay you.

 

The following can be a great resource for you..

http://www.agingcare.com/Featured-Stories/135476/How-can-I-get-paid-for-taking-care-of-my-elderly-parents-.htm

http://www.agingcare.com/Featured-Stories/135476/Government-programs-to-help-you-get-paid-for-caregiving.htm

http://www.caring.com/articles/medicaid-caregiver

 

I hope the above helps...

Regards,

83 days and 7 hours ago.

Reply

If the parents can and do pay for the care does the Social Security Administration accept these payments from the parents as earnings which qualify for social security credits? Of course social security taxes would have to be paid on these earning.

Accepted Answer

Hello trend,

Your question has been transferred to the tax forum to be addressed.

If your parents are actually paying you to help them with their needs, then basically you are receiving income from self employment. And as long as you report that income on your tax return and pay the appropriate self employments taxes (SS and Medicare) plus any income taxes which may apply, then yes, you receive SS credits for that income.

All income from self employment that is reported on Schedule SE is forwarded to the SSA to become part of your earnings record, and those earnings will count towards credits that you earn for SS benefits.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you trend, and let me know if you have more questions.

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Expert: Merlo
Pos. Feedback: 99.8 %
Accepts: 
Answered: 9/1/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad

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