If you’re considering Georgia’s Structured Family Care (SFC) program — or you’ve just started receiving payments as a family caregiver — one of the first questions most families ask is: do I have to pay taxes on this money?
Here’s a plain-English explanation of how SFC pay is treated for tax purposes, why it’s usually tax-free, and where to go for help with your specific situation.
The Short Answer: For Most Families, No
For the large majority of family caregivers in Georgia’s SFC program, this pay is not subject to federal income tax.
That’s not a loophole or a special exception Freedom Adult Care arranged — it’s based on a long-standing IRS rule that applies to Medicaid-funded home care payments nationwide.
The IRS Rule Behind It: Notice 2014-7
In 2014, the IRS issued Notice 2014-7, which addresses payments made under Medicaid Home and Community-Based Services (HCBS) waiver programs — the same kind of program that funds Structured Family Care through Georgia’s CCSP and SOURCE waivers.
Under this notice, qualified payments to a care provider for taking care of an individual living in their home are treated as “difficulty of care” payments, and difficulty-of-care payments can be excluded from gross income for federal income tax purposes — similar to how certain foster care payments have long been treated.
In practice, this means: if you’re a family member providing care to your loved one in your shared home, and you’re being paid through Georgia’s SFC program, your pay is generally excluded from your taxable income.
Why This Matters for Your Paycheck
Because this income is generally excludable, most SFC caregivers in Georgia:
- Do not owe federal income tax on their SFC pay
- May still see the payments reported in certain ways depending on how the program processes payroll (this varies, and is worth confirming with your tax preparer)
- Should keep good records of what they receive, in case questions come up at tax time
“Generally Tax-Free” Isn’t the Same as “Guaranteed for Everyone”
We want to be straightforward with families: tax treatment can depend on individual circumstances — your overall income, filing status, other benefits you receive, and how your specific payments are structured.
That’s why Freedom Adult Care always recommends:
- Talking to a qualified tax professional about your specific situation, especially the first year you receive SFC pay
- Keeping copies of your pay statements and any tax documents the program provides
- Asking your tax preparer specifically about IRS Notice 2014-7 and Medicaid waiver “difficulty of care” payments if they’re unfamiliar with this rule — it’s a common gap in general tax software and even among some preparers
Freedom Adult Care is not a tax advisory service, and nothing in this article should be taken as tax advice for your specific situation.
What This Means If You’re Considering SFC
If taxes have been holding you back from looking into Structured Family Care — don’t let that be the deciding factor. For most Columbus-area families already providing care to a parent or loved one, SFC pay is a meaningful, generally tax-free paycheck for work you’re already doing.
Have Questions About Your Situation?
Call or text Freedom Adult Care at (706) 786-3041 for a free eligibility check. We’ll walk you through how the program works for your family, and connect you with the right resources for tax questions specific to your situation.
For more on eligibility, pay, and how to apply, see our complete Structured Family Care guide and FAQs.
