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My Mom wakes up a couple times a night to use the bathroom. She uses a bedside potty but is so unstable upon getting out of bed either my sister or I send every night at her house. She lives by herself during the day and gets along fine but does not cook for herself. I come home everyday from work to fix and eat lunch with her. She wants to use her VA money to pay my sister and me for staying with her at night. What are the federal and state tax ramifications for my sister and me?

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VA Aid & Attendance can be use to pay relatives. Now when you go for recertification, you have to show where the money went. If you don't report the income, you cannot claim the expense. Can't have it both ways.
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There are no ramifications. The only thing would be, if she would ever go on medicaid and then, there would be a 5 year look back at her expenses. But, a little to you here and there, is OK. I think the amount that she could gift to you, is $13,000 per year, now. But, that is if you are certain she won't need medicaid.
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I may be totally wrong here--there are folks on this site that are much smarter than I--but if your mom wants to give you and your sister a little spending money there are no ramifications. You and your sister don't have to be "employees". You're just helping out mom a little and she'd like to repay the kindness. I don't think there needs to be strings attached.
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