Parents who provide home care for disabled adult children are eligible for retroactive tax refunds dating back to 2010 — but time is running out to claim some of that money.
A new IRS ruling allows these parents to claim state assistance as nontaxable income. These “difficulty of care” payments will now be treated the same as foster care payments.
With the 2014 ruling, the parents are eligible to amend tax returns that date back to 2010. However, the deadline to amend 2010 tax returns is April 15.
This year, Yelm resident Laurie Armendarez will receive an extra $5,600 on her tax returns — including $1,700 from 2010. Her 25-year-old daughter, Javincia, requires round-the-clock care because of physical and developmental disabilities. Over the years, the caregiver payments she received from the state had steadily declined, and with previous tax returns, Armendarez said she was grateful for any refund.
“It’s been such a blessing. It was so unexpected,” Armendarez said of the new tax break. “I just feel blessed being able to get some help.”
AARP Tax Aide program volunteers had prepared tax returns for Armendarez. However, those volunteers learned this week that they need specific training by the IRS before they can legally amend more returns under the new ruling, said Kirsten Kline, district coordinator for Thurston County.
As of Tuesday, at least 20 local residents had inquired about the new tax break, Kline said.
“Until we get training on how to specifically do it, we technically can’t do it, but people can still do it themselves,” said Kline, noting that AARP tax volunteers will receive training in January 2015. “We want to help these people, but we want to do it correctly.”
The IRS ruling was made possible by a local group of parents who provide home-based care for their children. Olympia residents Loren Freeman and Eugene St. John had led a two-year effort to change the tax structure for families in similar situations. The IRS approved the change in December.
Freeman uses state Medicaid payments to cover daily living expenses for his daughter, Faith, who requires full-time care. Freeman said he is gratified to learn that perhaps thousands of caregivers nationwide may benefit from the financial boost that comes with the new tax ruling.
“This is a breakthrough for so many people,” Freeman said. “It will have a tremendous impact for those teetering on the edge.”
In Washington, about 81,000 people have a developmental disability. A majority of the disabled live at home with parents or relatives, and about 23,000 receive state services, according to The Arc of Washington State.
Home-based caregivers save the state money by reducing the population of institutions. The state’s Medicaid payments assist individuals who would otherwise require full-time care in a hospital or nursing home.
Andy Hobbs: 360-704-6869 firstname.lastname@example.org