{"id":5848,"date":"2023-07-10T08:00:49","date_gmt":"2023-07-10T12:00:49","guid":{"rendered":"https:\/\/assistinghands.com\/125\/?p=5848"},"modified":"2023-10-25T10:06:36","modified_gmt":"2023-10-25T14:06:36","slug":"choosing-a-caregiver-agency-vs-independent-contractor-lexington","status":"publish","type":"post","link":"https:\/\/assistinghands.com\/68\/bostonnw\/massachusetts\/blog\/choosing-a-caregiver-agency-vs-independent-contractor-lexington\/","title":{"rendered":"Choosing a Caregiver: Agency vs Independent Contractors \u2013 What You Need to Know"},"content":{"rendered":"

Given the choice, most independent seniors in Lexington would prefer to remain at home for as long as possible. And although that\u2019s an admirable goal, roughly two-thirds<\/a> of all aging adults eventually need caregiving assistance to maintain their independence. When that time comes, families must make difficult decisions about their loved one\u2019s care, including whether to hire a professional caregiver directly or go through an agency<\/a>. What follows are some things you\u2019ll need to know before making your decision.<\/strong><\/em><\/p>\n

Key Considerations When Hiring Independent Caregivers<\/h2>\n

Families often believe they will save money by hiring a caregiver directly versus working with an agency. While they may be quite capable of caring for your loved one, be sure to consider these factors first:<\/p>\n

IRS rules for household employers<\/h3>\n

For federal tax purposes, someone is classified as your household employee<\/a> if you dictate what work they perform in the home environment, and how that work is done. An independent caregiver is technically your household employee if they receive instructions on how to care for your loved one from you or another family member and you provide the equipment and supplies they need.<\/p>\n

Conversely, self-employed individuals like independent contractors decide how they perform their work and furnish their own supplies and equipment. That said, most private-duty caregivers are not independent contractors. Be sure you understand the difference.<\/p>\n

Employment eligibility verification requirements<\/h3>\n

Once you’ve determined that your private caregiver will be classified as a household employee, the next step is to verify they can legally work in the United States. That will require the two of you to fill out IRS Form I-9<\/a> (Employment Eligibility Verification) and produce documentation that proves their eligibility to work in the US.<\/p>\n

Although the completed I-9 Form does not have to be formally filed with any US government agency, you, as their employer, must keep a copy for your records. You\u2019ll also need to apply for an Employer Identification Number<\/a> (EIN) and document your household employee\u2019s Social Security number.<\/p>\n

Tax obligations of a household employer<\/h3>\n

The federal and state tax amount that you must contribute for an independent caregiver who is a household employee will vary depending on which state you live in and how much you pay for their services.<\/p>\n

For example, in California, a household employer is defined by the state\u2019s Employment Development Department (EDD) as anyone \u201cwho has paid $750 or more in cash wages (checks and cash) to one or more household workers in a calendar quarter.\u201d If you are paying a private caregiver $15 to $20 an hour, hitting that threshold won\u2019t take long.<\/p>\n

Once that threshold is met, by law you must withhold State Disability Insurance (SDI) from the wages paid out and remit the withheld money to the EDD. If you pay more than $1,000 in wages during a calendar quarter, you must also remit Unemployment Insurance and Employment Training Tax payments to the EDD.<\/p>\n

With all these requirements, it\u2019s vital to maintain detailed records related to your employee\u2019s wages and taxes. Employment tax records must also be kept for at least four years after whichever is later, the due date of the tax return or the date when the taxes were paid.<\/p>\n

Each time you pay the caregiver, be sure to record the date of the payment and itemize the following:<\/p>\n