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11/2016 Victory for the IHSS page volunteers. CDSS complies and mails notices 10/2016! NOTICE Finally nearly 3 years late! IHSS 2014-7 Exempt 10/30/2016 Notice https://www.facebook.com/IHSS.CA/photos/?tab=album&album_id=1163949133686153
ALL LIVE-IN Providers it's no longer legal to count exempt income toward the recipient's household income! This also means no federal taxes if you file to report as exempt. We can show you how.
What do you have to do to claim 2014-7 exempt? It's easy if you have a little help. IHSS and IRS are not allowed to advise on tax preparation, but the IHSS recipients and providers and page volunteers, are not restricted to talk about anything topic in full detail. Get your tax returns and w2 forms out from the past 3 years to review at a glance. We'll help walk you through and explain.
4 Basic Steps:
1. File new w4 exempt
2. Prepare Taxes a bit differently
3. Amend if applicable (explore this option carefully)
4. Update New Income Status with CDSS (CDSS has access to confirm your tax status and results online.
5. In the future Guard your Exempt Income Status.
(see instructions, pros and cons, and more linked below)
Only for Providers that live with their IHSS recipients.
Be sure to do all 4 steps to qualify for exempt, for best results. https://www.facebook.com/IHSS.CA/photos/a.256758217738587.60703.242629215818154/1035969833150751/?type=3&theater
_______
In January 2014 new federal tax law that “All Live-In IHSS providers” must be exempt from federal income tax.
All provider still must file income tax returns.
LIST of gov agencies that can't count exempt income. For Medi-Cal purposes, if anyone wants to apply AFTER FILING or AMENDING EXEMPT STATUS if qualified. Article 10, Section 3 Exempt Income hhsa-pg.sdcounty.ca.gov/MediCAL/10/Section_3/Section_3_Exempt_Income.htm
Many providers are appealing including some of our page admins.
So far CalFresh is in non compliance.
I just made a list that has all the confirmations and sources to use to apply or appeal. Get your tax returns in order and get replies of rejection in writing. IHSS is calling to say exempt income is counted.; make them write it!
The officials want more evidence?! OK. A Collection of 2014-7 Exempt Evidence for Applications and Appeals. To Better Qualify or Retain BOTH Government and Private Benefits and Discounts.(If you have 1 live in recipient, you qualify) Do not wait to act. https://www.facebook.com/IHSS.CA/photos/a.256758217738587.60703.242629215818154/1046002655480802/?type=3&theater
Sample Schedule 1040 normal and 2014-7 exempt instructions. https://www.facebook.com/IHSS.CA/photos/gm.467883610068797/970102399737495/?type=3&theater
See source IRS links, qualifications, instructions, and explanations, below. We can help explain so you know your rights. Please read all content connected here, before you comment or message the page. Volunteers welcome to support page users, as always. Thank you.
IHSS 2014-7 History: In January 2014 the IHSS/Medi-cal agency failed to notify the IHSS employees and recipients, as required by federal law, but still tax payers are responsible to file taxes correctly. (The page users and managers are not professionals, but we can help announce the changes. We are hearing in most cases, with considerably fruitful results, for most providers, as reported by page users).
Simple Explanation: Claim the 2014-7 exemption: Live-In providers only, simply use a new W4 form enter exempt asap, and file your income tax returns a little bit differently, by NOT include the IHSS earned LIVE-IN income, toward your federal "Taxable income". This allows (live-in) providers to use tax federal income tax exempt status on their IHSS income, when filing your annual tax returns.
Qualifications to legally claim 2014-7 exempt status: work for IHSS and live with your recipient.
~ A providers are required to file federal and state income tax returns, on or before midnight on tax deadline.
~ Live-In Providers must work, for an agency that qualifies, IHSS/Medi-Cal included.
~ Live-In Providers that legally live with "their recipients" are required to file 2014-7.
~ Live-In Providers MUST CLAIM EXEMPT by entering "exempt 2014-7" on new w4 form(s), and FILE TAX RETURNS with their exempt status. (W4 info linked below) If you didn’t file exempt using W4 forms in the past, be extra sure to prepare and file your tax returns correctly, when it’s time to file annually at tax season. (now). We can help you know if an error was made in 2014 and forward tax years.
~ All IHSS Live-In Provider income is "federal income tax exempt", so do not include your IHSS income in your "earned income" to be sure that amount is not taxed, on your tax return when filing with the IRS. Qualification clarifications: ALL IHSS LIVE-IN Careproviders "legally reside with their recipient(s)" MUST CLAIM and FILE returns that include a new tax status that should benefit the provider and their recipient. IHSS/Medi-cal “IS” a qualifying agency and must comply with 2014-7 status. Parents and Fostercare of children up to 10 minors may be claimed, see links below, for more info.
What to Do:
1. W4 Obtain from IHSS or print from IRS and include your recipient’s EMPLOYER number from from your paystub. Complete and enter "Exempt 2014-7 on line 7. Use a different W4 form for each Live-in” recipient. Mail to the IHSS certified mail. IRS W4 forms: http://www.irs.gov/pub/irs-pdf/fw4.pdf
2. Prepare both federal and state tax returns and be sure NOT to include your IHSS income, on wages or groos income of your IRS Schedule 1040 return form and reflects on your state returns. (The 1040 EZ form will not accommodate the 2014-7 exemption. Use 1040 form) See instructions, below.
3. File both federal and state tax returns. Include a copy of your completed federal tax return, with your individual state tax returns.
4. Amended past years recommended, up to 3 years back. 2014, 2013, and prepare 2015 correctly before tax filing deadline, on or before tax deadline. (Access to amend 2011and 2012 tax returns and collect taxes paid are closed due to IHSS failure to comply) Hurry before the next amending year is also closed!
5. Be sure to file using EXEMPT STATUS, to avoid the need to amend and qualify for far reaching benefits and discounts. Government and non government benefits. See links.
6. If you like, let the IHSS page users know if you benefited, or if the new law harms you or your family. Message the page, if you have corrections or tips to share.
The EIC is not allowed when filing 2014-7 but the most won't miss the deduction is generally less than the amount gained if you claim and file your return correctly. OODLES of benefits take it's place... plus it's mandatory.
For amending up to 3 past years, (if you file 2015 correctly, so IRS recieves amended and original tax returns BEFORE" the 3rd year’s tax filing deadline (AMENDS MUST BE ACCEPTED BY GOV on or before midnight tax deadline NOT POSTMARKED LIKE FIRST FILING). The sooner you claim and start filing as “exempt” status, the more money you may be refunded and qualify for loans so claim all the exempt years applicable because the exempt status is priceless. IRS adds interested earned to amended refunds or you may apply refunds to your taxes owed for a credit.
NOTE this amending tip.
Even though the law was instated 1/2014, the government approves to file past year’s tax returns.
For example, File on time for 2015 tax year, to avoid need to amend the “past 3 years” time frame, amend as many years as qualified, and the employee will process an additional year’s worth of the previous years already paid but now “Live-Ins” get taxes paid back from IRS, if you act. Taxes that were previously deducted and paid. (this is different than normal withholdings and not to be confused with refunds of OVERPAYMENT of taxes.
________Quote from one of our volunteer tax professionals: “Now for me as a Live-In provider, because I have other employment, this is big. I have been owing taxes but with Notice 2014-7 I can go back, amend, and probably end up with over 10k in refunds? MANY tax prepares are uneducated on this and thousands of dollars could be lost if not filed properly. Jackson Hewitt just did 2011 and shorted me out of over $1200 because they didn't know what they were doing. This is VERY IMPORTANT: Even if the IRS has approved your tax returns for 2014-7, or didn’t file at all, in the past 3 years, or ever, the IRS may review/audit years randomly, so correct your tax stats immediately using W4 forms.“ (Will be getting my tax prep fee refunded)“ (Results vary)_________
>>>Basic IHSS Provider Tax Tips ~ ALL providers are required to file federal and state Failing to complete your tax returns is illegal, and could adversely effect your “credit scores”, and ability to obtain a bank loan at a good rate, a rental application. The government will allow you to fix any out of date filings, and hopefully make payments if you owe money. All W2 forms shall be mailed by employer/IHSS by the end of January, to file with your returns on or before 4/15/16. Individuals tax situations vary greatly, IRS requires all employees that earn more than $600 per year to FILE federal and state tax returns, regardless of predicted out come of refunds, balance or taxes due.
>>>For Live-In Providers, the tax payer lives with the beneficiary, and for this reason the tax break is intended to benefit the provider’s household and therefore their live-in recipients as well. Also note that tax return results are often used to prove income to qualify for benefits of various types. It’s important to change your tax status to exempt on W4s to avoid need to amend and claim money that is rightfully yours, and waiting for you now, in most cases. Claim and file exempt w4 and tax returns to qualify for benefits.
ONLY employee's Live-in recipients are exempt. If you have more than one recipient, that does not live with the provider, that IHSS non exempt income is still taxed. Spousal income benefits from exempt income and taxed less! Everyone listed on exempt tax returns qualifies for exempt status.
Print your new IRS W4 forms here: http://www.irs.gov/pub/irs-pdf/fw4.pdfSources:
Internal Revenue Bulletin: 2014-4 January 21, 2014 Notice 2014–7 Foster care payment, Medicaid waivers http://www.irs.gov/irb/2014-4_IRB/ar06.html
>>>IRS Certain Medicaid Waiver Payments May Be Excludable From Income BUT ALL LIVE IN PROVIDERS QUALIFY FOR FULL EXEMPT simple as that. https://www.irs.gov/Individuals/Certain-Medicaid-Waiver-Payments-May-Be-Excludable-From-Income
IRS FREE TAX HELP https://www.facebook.com/IHSS.CA/photos/pb.242629215818154.-2207520000.1452105677./954266641321071/?type=3&theater
Notice 2014-7 Explained by Regina Levy, CPA http://ihssadvocate.com/news/notice-2014-7-explained-by-regina-levy-cpa
>>>FAQ IRS 2014-7 https://www.irs.gov/Individuals/Certain-Medicaid-Waiver-Payments-May-Be-Excludable-From-Income
IHSS Income No Longer Federally Taxable http://www.empoweryourfamily.org/blog/2014/07/23/ihss-income-no-longer-federally-taxable/
IRS FREE TAX HELP https://www.facebook.com/IHSS.CA/photos/pb.242629215818154.-2207520000.1452105677./954266641321071/?type=3&theater
__________ Turbo Tax Section: Turbo Tax and similar programs to purchase or use to prepare your taxes from the comfort of your home “online” is great for those of us with outdated computers. Compare to the Tax services and their company policy and guarantee of refund of fees. Note, tax preparation services to NOT pay tax penalties, or tax errors, and are only obligated to refund your money and stand up with you in an audit, to confirm the error was not the tax payer’s fault. How about we just avoid the audit from the start, and filing correctly? In TurboTax (TT) 2013, enter your income as received either on a W-2 or 1099-MISC, then offset it by taking these steps per Notice 2014-7:
1. Federal Taxes tab (left of screen)
2. Then Wages & Income
3. Pick, “I’ll choose what I work on” Button
4. Scroll down to Less Common Income
5. (IHSS providers use W2 forms) Pick start next to Misc Income, 1099-A, 1099-C
6. On the next screen choose other reportable income (at the bottom)
7. Say yes that you have other taxable income.
8. For description enter “Notice 2014-7”. Enter the amount of the income with a minus sign (-) in front of it.
This effectively removes your income from the tax calculations and will appear on line 21 of your Federal Form 1040.
You will need to start the amend process and then repeat the steps above for each tax year.https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed
Review the IRS FAQs Notice 2014-7, which provides updated information and rules here: http://www.irs.gov/Individuals/Certain-Medicaid-Waiver-Payments-May-Be-Excludable-From-Income.
>>>How do I Amend (Change or Correct) a 2014 Return in TurboTax?https://ttlc.intuit.com/questions/2589210-how-do-i-amend-change-or-correct-a-2014-return-in-turbotax
_____________________ end Turbo Tax section.
Internal Revenue Bulletin: 2014-4 January 21, 2014 Notice 2014–7
Foster care payment, ”Medicaid” waivers http://www.irs.gov/irb/2014-4_IRB/ar06.html
IRS W4 sample and link to IRS website. https://www.facebook.com/IHSS.CA/photos/a.950200671727668.1073741875.242629215818154/950200685061000/?type=3&theater
Sample of a W2 tax form that the employer/IHSS must mail to all employers by the end of January, annually to file with your taxes. https://www.facebook.com/IHSS.CA/photos/a.950200671727668.1073741875.242629215818154/950200691727666/?type=3&theater
Thank you to volunteers of the IHSS support page, for supplying this valuable tip! (The page users and managers are not professionals, but we can help announce the changes. We are hearing in most cases, with considerably fruitful results, for most providers, as reported by page users).
The IHSS page is managed by volunteer providers and recipients, like you. Please LIKE the page to stay connected. Thank you. https://www.facebook.com/IHSS.CA
PAGE TEXT UPDATED: 2/2/15 ..8:15pm. ... See MoreSee Less
