Follow
Share

Do I still have to file a 1099?


I thought a contract would mean that I would have to pay minimum wage, even if they are freelance or an independent contractor. My parent may need Medical Assistance in the future.

This question has been closed for answers. Ask a New Question.
Why would you pay lower then minimum wag at all and especially, if they are freelance or independent? Do you realize this person would have to pay taxes, SS, Medicare and other things off of what he or she would make? People can not support themselves on minimum wage little long if they have to pay all their taxes and what nots!! Does this seem fair or right?


Just my 2 cents!!
Helpful Answer (4)
Report
THTHTH Mar 2020
Yep, totally get it. The effort is to extend parents assets for as long as possible. To give a little amount as something is better than nothing. If parent needs hired care in the future funds would then be available.

This is not a primary income stream for anyone. No self-employment taxes on their income.
(0)
Report
No. You can’t file a 1099. And you need to pay at least minimum wage. Contractor or freelancer isn’t relevant here because a family caregiver is neither of those and even if they were, they would charge MORE than minimum wage. Why would you expect a family member to work for less? That’s wrong. Plain wrong.
Helpful Answer (4)
Report
needtowashhair Mar 2020
If they are paying someone for a job, even a family member, then they do file a 1099 if that payment is more than $600/year.
(2)
Report
See 3 more replies
I don’t mean to be rude but why on earth would you pay someone under minimum wage? Is this their only source of income? Don’t expect to keep an employee long. Who can live on a wage that low?
Helpful Answer (3)
Report
THTHTH Mar 2020
Family only, it is not their primary source of income. Caregiving is spread between 8 caregivers.

Hired caregivers would be paid market rate.

This is to extend parents money and provide them care in their home for as long as possible.
(0)
Report
I am confused by some of these responses.  Like many people,  I get paid nothing for caring for my mom.  Are you guys saying that I can either be paid nothing or minimum wage, but nothing in between?  Makes no sense to me.
Helpful Answer (1)
Report
NeedHelpWithMom Mar 2020
I didn’t get paid either but if I had been paid I think it should have been more than minimum wage, not less than minimum wage. Who can live off of that? Thank God my husband has a good job. Still, I hated that I had to stop working. I missed working.

The pay has to be set up in a contract.
(2)
Report
See 2 more replies
There are a thousand ways to "cook the books" and you can bet that the less than honest employ every one of them, sometimes I think the law abiding are their own worst enemies. If you are worried about the rate of pay being called into question just adjust the # of paid hours and the rest can be considered volunteer overtime.
Helpful Answer (2)
Report

In my opinion, you may find that trying to keep parent in their home will be a lot of work and stress. Then you are relying on other people to be there on time. What are u going to do when someone is sick.

Then there is Medicaid maybe in parents future. You are going to have to account for the money spent on caregivers. From what has been mentioned on this forum, aides are not considered self employed. You r the employer and as such need to deduct taxes and SS. Its not really fair to those working that they don't receive SS credit. Then as mentioned family members vs actual employees.

In my State minimum wage is $10 an hr. This is average payment for an aide in my area. I would check with your local Labor Department to see how you should handle these employees.

I just had to help someone with the difference between a W2 form and a 1099. A W2 form is for employees only, you worked for the income. A 1099 is used for things like dividends, pensions, SS, interest on bank accts, CDs...any income you need to pay taxes on that you didn't work for, your not an employee. Since you will be hiring someone, I don't think a 1099 can be issued. It will have to be a W2 form. And this will need to show taxes deducted. This is my thinking so talk to the labor board and maybe a CPA. I would get my ducks in a row because what u do now could effect you parent later on.

By the way, I have heard that babysitters are paid minimum wage now. An aides responsibilities are going to be much more.
Helpful Answer (1)
Report
THTHTH Mar 2020
The 1099-Misc (for 2019 - under new name for 2020 calendar year. This 1099 - there are lots of different ones - is used for any misc. income from anyone....Like tips, rewards, etc. for a musician, etc...For Medicaid, we have to file if anyone, including family members earn $600/year or more. If not, they say they were gifts and it may disqualify them from Medicaid. They go into "pending" status and if the books haven't been done correctly, they get disqualified. Every state has a different level of tolerance and protocol. I think we also have to have detailed time sheets, etc. i.e. time arrived, hours worked, services provided.

Yes, I'm not a person that believes a parent needs to stay in their home to be happy. It seems the caregivers need to be happy and know how to kindly transition them! However, other family members feel strongly otherwise, and my parent also is competing with all of her friends and tracking who dies in their home and who got moved out by their children! Somehow the ones that die in their homes get a prize of some sort? They still die, right? Geez! I guess we may all be there one day competing in the same way? Even though I swear I will never be like that with my children! We'll see, right?!
(0)
Report
This question has been closed for answers. Ask a New Question.
Ask a Question
Subscribe to
Our Newsletter