MassHealth’s Personal Care Attendant (PCA) Program is self-directed, which means the MassHealth member is responsible for recruiting, hiring, training, scheduling, and managing their PCA. This includes reviewing and approving activities and hours worked, requesting approval for PCAs to work overtime, and terminating PCAs when necessary.
The Internal Revenue Service (IRS) recently determined that payments to a personal care attendant (PCA) for services provided to a Consumer residing in the same home as the PCA can be considered “difficulty of care payments” and may be excluded from federal and state income taxes. In order to be eligible for this tax exemption, PCAs have been instructed to complete the Application for the Difficulty of Care Federal/State Income Tax Exclusion through Tempus Unlimited Fiscal Intermediary (Tempus).
Beginning January 1, 2026, any MassHealth member or applicant who has submitted the above application to Tempus and is seeking to exclude PCA income from their countable income for purposes of a MassHealth eligibility determination, must provide MassHealth with verification that the income qualifies for the Difficulty of Care Payments tax exclusion. A PCA may verify that income qualifies for the Difficulty of Care Tax Exemption by providing MassHealth with a copy of the Application for the Difficulty of Care Federal/State Income Tax Exclusion they submitted to Tempus.
The Difficulty of Care Payments tax exclusion can impact a PCA who:
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- Applies for MassHealth benefits,
- Is an existing MassHealth member who is due for their annual renewal, or
- Is an existing MassHealth or Health Connector member who contacts MassHealth to report a change in circumstances.
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PCAs will be required to provide verification upon applying for or renewing their health care coverage, or when reporting a change to MassHealth.