By Bob Katzen
Gov. Healey announced that an estimated 18,000 of the state’s 60,000 of live-in PCAs who take care of MassHealth members will no longer pay state or federal income taxes on their wages, under a new IRS ruling that was sought by the Healey administration. PCAs are health care professionals who help people with disabilities keep their independence by aiding with activities of daily living, such as bathing and dressing. The exemption, projected to save a PCA $5,000 or more per year in taxes, applies only to PCAs who live in the same household as the individual receiving the care.
Under the ruling, income earned by live-in workers qualifies as “difficulty of care” payments, a federal tax law classification that excludes certain caregiving wages from taxable income. Because the Bay State generally follows federal income tax definitions, the payments would also be exempt from the state’s 5 percent income tax.
“We are working every day to identify ways to make life more affordable for the people of Massachusetts,” said Gov. Healey. “Personal Care Attendants do incredibly challenging work to care for the most vulnerable among us, and they shouldn’t have to also worry about being able to afford to meet their own basic needs.”
Justin Graceffa, PCA Workforce Council Vice Chair said, “As a longtime consumer-employer and vice chair of the PCA Workforce Council, I have seen firsthand how hard PCAs work and how dedicated they are to the people they support. Even though they do amazing work, PCAs are often overlooked and underpaid. This tax break will help address that issue and allow PCAs to continue providing high-quality care.”
“During an affordability crisis in our country, our administration is exploring every action we can take to ease financial burdens on Massachusetts residents and support critical segments of our workforce,” said Secretary of Health and Human Services Kiame Mahaniah. “This exemption brings substantial tax relief for trained live-in friends and family members who are providing crucial health care services for MassHealth members with disabilities.”