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Autumn 2026·8 min read·Bruce Tollefson, Abloom Senior Living

Paying a family member to care for your parent

What a Minnesota family should put in writing before the money starts moving.

Three separate questions

You have not missed a form. There is no single office in Minnesota that handles this, and that is why asking about it feels faintly improper, as though you are angling for something. You are not, and plenty of families pay a relative for care. The state, the IRS, and the county all have rules about it, and those rules do not live in one place.

These are three separate questions with three different answers:

  • Can your parent, or the family, pay a relative out of their own money?
  • Will a public program pay a family member?
  • Does paying someone now change anything later, at tax time or when your parent applies for help with long-term care costs?

The first is the one most people come in asking, and it is both the right place to start and the shortest answer. The third is the one that causes families trouble, usually years after the payments started, which is why most of this page is about it.

We are a care provider in Washington County, and this article is general information, not legal, financial, or medical advice. A personal care agreement and the tax treatment of caregiver wages both turn on your family's specifics, so have an elder law attorney and a tax preparer look at your version before you sign anything.

Paying out of the family's own money

A parent can pay an adult child for care out of her own savings or income. Siblings can pool money to pay the one who does the driving and the showers. Nothing about that arrangement requires a license or state permission.

Minnesota's licensing law covers this. The people who need a home care license do not include "an individual who only provides home care services to a relative," under Minn. Stat. 144A.471, subdivision 9, clause 5. So your sister does not need a comprehensive home care license from the Minnesota Department of Health to help your father shower, and neither do you.

The exemption also means there is no agency involved. No agency stands behind a relative. There is no nurse writing a care plan, no supervisor to call when something changes, no one who sends a different caregiver when yours has the flu. For many families that trade is worth making, because the person doing the care already knows which chair your mother can get out of and which one she cannot.

Rates are usually the part that stalls everything. Families tend to look up what agencies charge, decide that is either too much or too little to ask of each other, and then stop talking about it. You do not have to settle on a number this week. It helps to first write down what the week actually requires, hour by hour, because the week usually adds up to more hours than anyone has counted. Our page on how many hours of help a week really takes walks through that count.

Put it in writing

Do this part even though it feels cold. The conversation is easier now than after something has happened.

Money that moves from a parent to an adult child with nothing on paper looks, later, like a gift. That matters if your parent ever applies for Medical Assistance to help pay for long-term care. The Minnesota Department of Human Services, in its eligibility policy manual, sets the lookback period at 60 months before the baseline date and states that "All transfers made during the lookback period must be evaluated." A county worker reviewing five years of bank records sees transfers, and transfers that were not compensated can carry a penalty that delays coverage.

What keeps a payment from reading as a gift is a written agreement signed before the payments start, describing the services, the hours, the rate, and the start date, plus an actual record of the payments and the caregiver reporting the income. Elder law attorneys draft these routinely and call them personal care agreements or personal services contracts.

Homemade agreements are the ones that tend to fail, usually because the requirements are easy to miss. They turn on details like whether the rate is reasonable for your area and whether the services were actually provided. This is routine work for a Minnesota elder law attorney, usually one appointment with a draft in hand, and it does not have to happen this week.

Taxes

When your parent pays you, your parent is usually a household employer, which most families do not realize.

The IRS lays out the thresholds in Publication 926, the Household Employer's Tax Guide. For 2026, a household employer who pays "cash wages of $3,000 or more in 2026 to any one household employee" must withhold and pay Social Security and Medicare taxes on those wages. Federal unemployment tax applies separately, at total cash wages of $1,000 or more in any calendar quarter of 2025 or 2026.

Who is paying whom matters, because Publication 926 lists certain relatives whose wages are not counted as Social Security and Medicare wages at all. Wages you pay your own parent are on that list, with a narrow exception that involves your parent caring for your child. So a daughter paid by her mother and a son paying his own mother are treated differently for Social Security and Medicare purposes. A tax preparer can tell you which one your family is in.

Paying cash and saying nothing is the common shortcut, and it costs the caregiver most. Wages that go unreported build no Social Security earnings record for the person doing the work, which shows up decades later in her own retirement. If your family is also tracking what portion of care costs might reduce a tax bill, our post on whether in-home care is tax deductible covers that separately.

When a public program pays a family member

Minnesota does have a route where public money pays a relative. It runs through Consumer Directed Community Supports, usually called CDCS, which lets a person on certain programs direct their own budget and hire their own workers.

Washington County's CDCS page says participants can "Hire the people they want to provide those services, including family members like parents or spouses." Families in the county do use it. The county lists the Elderly Waiver, the Alternative Care Program, and several disability waivers among the programs whose enrollees can use CDCS, and its CDCS coordinator is named there if you want to ask whether your parent's program is one of them. The state's own CDCS page describes the option only in general terms and leaves the rules on hiring relatives to the counties.

Getting there is the slow part. CDCS sits inside a waiver or the Alternative Care Program, and reaching one of those starts with an assessment and, for most waiver routes, qualifying financially for Medical Assistance. Our page on the MnCHOICES assessment explains what that appointment is and how to ask for one.

Abloom Senior Living is paid privately or through long-term care insurance, and we do not bill Medical Assistance or Minnesota waivers for in-home services. If the waiver route is the one your family needs, we will tell you on the first call and give you the names of agencies that do accept it. Minnesota Aging Pathways, formerly the Senior LinkAge Line, is the better first stop for program questions anyway. The Minnesota Board on Aging describes it as a free statewide service and Minnesota's federally designated long-term care options counseling service, reachable at 800-333-2433.

What being a relative does not cover

The licensure exemption only decides who needs a license, and training is a separate question.

Some tasks at home require a nurse, whether or not a family member is doing the rest of the care. A feeding tube, a tracheostomy, a BiPAP machine, a wound that is not closing: a relative who takes those on without training can hurt your father, or herself, without knowing why. Nobody may have told her that. Plenty of families split the week instead: the relative does the daily routine, and a nurse comes out for the clinical tasks. Our nursing visits page lists which ones ours cover, including tracheostomy care without a ventilator and tube feeding.

The ordinary work is its own skill too. Bathing someone who does not want to be bathed, moving someone safely who is heavier than you, reading the early signs that a urinary tract infection is starting: our personal care page describes what trained caregivers do with those, and much of it can be taught to a family member by a nurse who comes out once.

The person doing all of it

A paid family arrangement that is going well has one particular risk: the family stops lining up anyone else to help.

Even a daughter who is paid fairly and covers six days a week is one person. She gets sick, or her own kids have a concert, or her job changes. If nobody else has ever done your mother's evening routine, a single bad week can turn into a placement decided in a hospital hallway at nine at night.

The families who avoid that build in a second set of hands early, usually by having an agency cover a shift or two a week so that someone outside the family knows the routine, the medications, and where the shower chair goes. It also means the paid relative is not the only person your mother will accept help from. If the weight has already landed on one sibling in your family, our post on when caregiving falls to one sibling gets into how families redistribute it.

Where to start

If you are in the middle of this and do not know what to do first, a reasonable order is to write down the week hour by hour, call Minnesota Aging Pathways with the program questions, and take a draft agreement to an elder law attorney. None of that requires deciding anything today.

If you would like a second opinion on what the week actually needs, you can request a visit and we will come to your parent's home in Woodbury or anywhere in the East Metro and talk it through, or you are welcome to come see the five-resident house in Woodbury. We may not be the right fit for your family, and if we are not, we will say so and point you toward someone who is.

Frequently asked questions

Can my mother pay me to take care of her?

Yes. A parent can pay an adult child out of her own money, and Minnesota's home care licensing law excludes "an individual who only provides home care services to a relative" from licensure, at Minn. Stat. 144A.471, subdivision 9, clause 5. The things to get right are a written agreement signed before the payments start and honest reporting of the income.

Will paying me affect my parent's eligibility for help with long-term care later?

It can, if there is nothing on paper. The Minnesota Department of Human Services evaluates all transfers made in the 60 months before the baseline date for a Medical Assistance long-term care application, and money that moved with no documented services in return can be treated as an uncompensated transfer. A signed personal care agreement and payment records are what show the money bought care. An elder law attorney should look at your version.

Do taxes apply if my parent pays me?

Usually yes. IRS Publication 926 says a household employer who pays cash wages of $3,000 or more in 2026 to any one household employee owes Social Security and Medicare taxes on those wages, with federal unemployment tax applying at $1,000 in a calendar quarter. Publication 926 also lists relatives whose wages are not counted, including wages you pay your own parent, so the direction of the payment changes the answer. Ask a tax preparer about your situation.

Can a family member be paid through a Minnesota waiver?

Through Consumer Directed Community Supports, yes. Washington County's CDCS page says participants can hire the people they want, "including family members like parents or spouses," and lists the Elderly Waiver, the Alternative Care Program, and several disability waivers among the programs whose enrollees can use CDCS. Reaching a waiver starts with an assessment and, for most routes, qualifying for Medical Assistance.

Does a relative caring for a parent need any training?

Nothing is legally required. Nursing tasks are a different matter, and a nurse can teach a family member a great deal in one visit, including safe transfers and what to watch for after a hospital stay.

Related reading

Sources

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