A recent IRS Private Letter Ruling has expanded the “difficulty of care” income tax exclusion to include the Massachusetts Personal Care Attendant (PCA) program – a major change that will benefit many family caregivers.
Previously, this exemption only applied to caregivers under Medicaid waiver programs. Now, even in our state’s non-waiver programs, such as the PCA program, participants may exclude those payments from both federal and Massachusetts income taxes if they live with the person who is receiving the care. This clarification recognizes the essential role of live-in family caregivers and could result in significant tax savings for those supporting loved ones with high care needs. The change will take effect for applications submitted by December 1, 2025 and fully implemented by January 1, 2026.
Governor Healey Announces Major Tax Relief for Health Care Workers
