The tax code already favors care — seven different ways. Here’s every lane, who it fits, and the honest limits. Then the part that matters even when no tax break applies at all.
The seven lanes
Under IRS Notice 2014-7, Medicaid self-direction payments to a caregiver who lives with the person they care for are excluded from federal income tax entirely. Real wages, federally blessed. We route eligible families to it.
Requires living in the same home + Medicaid waiver/self-direction payments — not private pay.
Get paid to care for your own →Where a physician documents medical necessity, care and wellness costs become HSA/FSA-eligible — an effective ~20–35% discount at your marginal tax rate. Works for non-live-in paid care too.
Letter of medical necessity required; not everything qualifies — we’re honest about what does.
The LMN, on your ComfortCard →Up to ~$5,000/yr pre-tax through an employer Dependent Care FSA for a qualifying dependent’s care — plus the federal dependent-care credit. Stacks with employment, not living arrangement.
The person must qualify as your dependent; employer plan required for the FSA.
See what you qualify for →Neighbor-to-neighbor hours at par (1 hour = 1 hour) are treated as noncommercial mutual aid, not taxable barter. Give an hour, bank an hour, spend it when you need it.
Stays tax-safe only at par and never cashable — which is exactly how ours works.
Bank an hour — it’s live →Care given freely is never income. Cash gifts are tax-free to the recipient (donors: ~$19k/yr per person before any filing). Families quietly fund a lot of care this way.
A “gift” that’s really disguised wages gets recharacterized — keep the lanes honest.
Care inside your circle →When a consumer co-op returns surplus to members based on their own personal-use purchases, that refund is generally a price rebate, not taxable income. The co-op structure itself is a tax-favored value-return channel.
Applies to patronage on personal purchases; worker patronage is earned income.
How ownership works →Lodging provided on the premises for the employer’s convenience, as a condition of employment, can be excluded from the caregiver’s income (IRC §119) — the tax logic behind the room-for-care model.
Structure matters; informal rent-for-services swaps are technically barter. This one gets counsel before scale.
The homeshare match →The part that matters even with no tax break
Fair question: “if the caregiver doesn’t live in, most of this isn’t tax-free — so why the co-op?” Because a standard agency keeps 50–63 cents of every dollar a family pays, and ships it to owners who’ve never met you. The co-op keeps 8–15 cents to run the rails, and splits the rest three ways: a lower bill, a better wage, and ownership. Same hour of care.
| 20 hrs/week of care | Standard agency | The co-op |
|---|---|---|
| Family pays | ~$38/hr · $760/wk | ~$29/hr · $580/wk |
| Caregiver earns | $16–17/hr · ~$330/wk | $26/hr + equity · $520/wk |
| Middle takes | ~55% · $430/wk | ~10% · $60/wk |
| Over a year | — | family saves ~$9,400 · caregiver earns ~$10,000 more |
And the margin flip buys the thing families actually care about most: the same caregiver, year after year. Industry turnover runs ~64%; worker-owned co-ops run ~24–36% — because owners stay. For a senior — especially with memory loss — continuity is quality. No agency can match the price and the wage and the retention at once without breaking its own business model. That’s the pitch. The tax lanes just stack on top.
Tell us your situation — we’ll show you every dollar and every lane you already qualify for.
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