No Good Deed

Everyone hates taxes. But how much more suck would it be if you were taxed on double the wages you actually get paid?

That's exactly what my situation was for my 2005 taxes and this year will likely be the same unless I can find a way to do something about it! Tax experts I've talked to about it can't give me a solution (even one with 20 years of experience with the IRS!!). I'm sure other caregivers are in a similar predicament, as well. All because of a nasty little piece of crap called "share of cost". It's sort of like a deductible for Medi-Cal and other services elderly and disabled people (like my parents) qualify for. The job of taking care of a family member (or two in my case) is extremely difficult, even without a bunch of government bs. All I'm trying to do is make my parents' lives better, but I get hit will problems left and right thanks to bs like this.

The tax thing is just one of about a half-dozen headaches the government has stuck me with. To illustrate the lunacy of this situation I made up the following interview. While fictional, it's based on a true story...

Interviewer: So, you are a care provider through the IHSS program in Sacramento.
Provider: Yes, uhuh.
I: So IHSS pays you on behalf of the person you take care of because they otherwise wouldn't be able to afford the care they need, is that right?
P: Yes. IHSS refers to that person as the recipient.
I: If a recipient's income is even $1 over a certain amount, they immediately have a large "share of cost". This is the amount the State of California requires them to pay before the State covers any of the cost, correct?
P: yes.
I. Does your recipient have a share of cost (soc)?
P:Yes.
I: How much is the soc?
P: $749
I: Can the recipient afford to pay the soc?
P: no. It's equal to about 50% her social security. If she actually paid me she would not be left with enough to live off of.
I: So you're not getting all the pay that you've actually earned?
P: no.
I: Really? But you still take care of her anyway. Why would you do that?
P: The recipient is my mother. If I didn't do it, she'd be alone, and she's unable to properly care for her self.
I: So she can't live on her own?
P: No, not safely. She's disabled and with her age it's easy for her to forget her medicine. Or fall.
I: So you work the hours, and only get part of the wages you earn.
P: Yes.
I: Are taxes deducted from your check every month?
P: Yes. Federal and State, plus deductions for Medicare, disability insurance, health benefits and union dues.
I: And the deductions are based on your entire gross wages?
P: Yes.
I: including the $749 you don't actually receive?
P: Yes.
I: Wow. And what does IHSS say about that?
P: Nothing. They say they have to go by policy and government regulations.
I: Sure seems unfair to you.
P: yes it is.
I: you mentioned union dues. What is your union's reaction to this?
P: Well my union is United Healthcare Workers (UHW). They've never been any assistance to me at all with any problems I've had.
I: Really?
P: No. They always start going on and on about all the great things they have already done for me and other members, but when it comes to my individual issue, they're not interested.
I: Wow. How far have you pursued this?
P: Not far. I've already spent a lot of hours on the phone, on hold, getting the runaround with IHSS and the union. I'm a caregiver for my mom plus I have a part-time job to make up the $750 I don't get from IHSS. I don't have time or the energy to spend being sent in circles.
I: So what happens come tax time? What happens on your income tax retrun?
P: The $749 per month that I never see translates to $8,988 per year and is included in my gross wages listed on my W2. I have to claim that as income even though I don't get it.
I: And IHSS doesn't offer any help with that?
P: No. And they have a rule that if the recipient doesn't pay the share of cost they will be taken off IHSS altogether. Whether or not they can't afford to pay it is irrelevant to IHSS.
I: So, it's a program to help people who need care and can't afford to pay for it on their own, but if they can't afford to pay their soc they don't get any assistance at all?
P: No. None.
I: Freak! That's ridiculous. That's kinda like telling your 5 year old child you're going to take her to Disneyland, but she has to pay for half. What? nothing in the piggy bank? Well, she can't go at all then.
P: Yeah, I guess it is. It's exactly like that. And pretty much just as senseless and unfair.
I: So what do you do then?
P: What can I do? I just work hard, get only about half of what I earn, pay taxes on almost double what I'm actually paid, and try to help my mom have a safer, more comfortable life at home.
I: What would happen if you weren't able to take care of your mom?
P: Well, since my dad is no longer living, and my other relatives don't help out, I think my mom would have to live in a nursing home.
I: That would be expensive. Can she afford to do that?
P: Well, she is on Medi-Cal. She will still have a high share of cost but Medi-Cal would cover the difference.
I: Do you know how much that would be, total for her to live in a nursing home?
P: What I've learned is that the average cost for a disabled patient to stay in a nursing home is more than $60,000 a year.
I: That's a lot. And how much would the state be paying for you to take care of your mom in her own home, if they also paid the share of cost?
P: About $1600 a month, so $19,200.00. But since they require my mom to pay the first $749 every month, the State is only paying $10,212 per year.
I: So, IHSS is a program designed specifically to allow a person in your mother's condition to live more comfortably by being taken care of in her own home rather than in a nursing home, and by doing so you are also saving the State at least $50,000 a year?
P: Yes.
I: And yet they won't help you with the share of cost problem?
P: So far no.
I: And you've explained to them what it's costing you in taxes? You've explained the circumstances?
P: Yes. Actually, they say they can't help because of the way policies and laws are written.
I: You're saving the State more than $50,000 a year and they won't give you any relief from paying taxes on $8,988 of wages that you never actually get in the first place?
P: No.
I: That's really not reasonable or sensible at all.
P: No. It's not right. It's wrong any way you look at it.