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I provide care for people who are wards of the state I was

told because I provide a...
I provide care for people who are wards of the state I was told because I provide a service and then later be reimbursed by the state that I do not need to pay taxes if at the end of the year I have a profit ... Is this true
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Answered in 3 minutes by:
8/23/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,592
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

Provided that you care for five or fewer individuals at a time, this is correct - your reimbursement is not taxable, even if you spent less on their care than you were given

Customer:

What is the tax code so I my have my CPA know of this

MyVirtualCPA :

26 USC Section 131

MyVirtualCPA :

You can care for up to 10 children under the age of 18 or up to 5 adults

Customer:

Thank you i run a care home that gets state reimbersment

MyVirtualCPA :

I think it's great that you do that. It's such an important service

Customer:

What if tgethe care home have 10 adults but 5 are reimburreimburse by the state is this still aloud

MyVirtualCPA :

You would have to pay tax on the 5 private pay individuals

MyVirtualCPA :

but not the 5 wards of the state

Customer:

OK great thank you

MyVirtualCPA :

You're welcome

MyVirtualCPA :

Is there anything else I can assist you with today

Customer:

As a care provider are there any other laws or codes that would help me reduce my taxes

MyVirtualCPA :

Well, excluding the income is a big reduction in taxes

Customer:

Sorry for the open ended question

MyVirtualCPA :

That's perfectly fine, but other than the exclusion there are no other tax credits that I am aware of

Customer:

I was not sure someone elelse told me that if iI was paying my employees ...and emploemployee iI coukdcould just pay strstraight time is that true

Customer:

Sorry its not typing up right

MyVirtualCPA :

I'm not sure that I understand what you are saying...are you talking about salary vs hourly?

Customer:

Hourly

MyVirtualCPA :

Yes, you can pay them hourly but you would have to pay them overtime if they worked more than 40 hours

Customer:

OK that's what I have been.... Just looking to cut cost

MyVirtualCPA :

I understand. It's a tough economy

Customer:

So if iI give that tax code to my CpaCPA he will be able to look it up

MyVirtualCPA :

Yes, he should be able to look it up.

MyVirtualCPA :

Here's a link though for you

MyVirtualCPA :

http://www.law.cornell.edu/uscode/text/26/131

Customer:

If so that will be about it

MyVirtualCPA :

Okay. Once you have all your questions answered, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

OK great thanks

MyVirtualCPA :

You're welcome. And feel free to come back to this page and ask follow up questions

Customer:

How long can I do that for

MyVirtualCPA :

Until you close out the question in your link

MyVirtualCPA :

You have to come to this exact page though so bookmark it

MyVirtualCPA :

It won't be in the same live chat format, but I'll get your message and respond to you - it's called "question and answer" format

Customer:

OK great thanks

MyVirtualCPA :

But, for me to receive credit for helping, I need a rating.

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,592
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified
Megan C and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 4 years ago

I have people at my care home assisted living who are on Ahccs and its call Altc. Arizona long term care is there a tax code that will help me right off some of my income from state reembursment

Ask Megan C Your Own Question
Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,592
16,592 Satisfied Customers
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

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