In a significant move to support personal care attendants (PCAs) in Massachusetts, Governor Maura Healey announced on Monday that those who provide care to individuals they live with will no longer be subject to state or federal income taxes. This groundbreaking decision has the potential to save around 18,000 caregivers approximately $5,000 each year.
To facilitate this change, the state reached out to the U.S. Internal Revenue Service, seeking confirmation that wages earned by live-in personal care attendants, often referred to as PCAs, are eligible for a federal income tax exemption. This exemption falls under a program designed for live-in care providers who receive payments through Medicaid.
The funding for Massachusetts’ PCA program comes from MassHealth, which is the state’s Medicaid initiative. Caregivers can start benefiting from this exemption when they file their taxes for the year 2025, allowing them to reclaim their income tax. Additionally, beginning January 1, they can adjust their tax withholdings to stop future deductions.
Secretary of Health and Human Services Kiame Mahaniah emphasized that this initiative aims to make life more affordable for a low-wage workforce that provides essential services to residents across the state. He pointed out that PCAs earn relatively low wages, ranging from $19.50 to $22.40 per hour, and face significant challenges, particularly when caring for family members or others within their homes.
Mahaniah stated, "You’re emotionally connected to the very people that you’re serving. We can never pay them what they’re worth." This statement highlights the emotional and financial burdens that caregivers often carry.
Take, for instance, William Cail, who has been caring for a woman in Everett for over two decades. During the COVID-19 pandemic, he moved in with her to ensure her safety, and he has remained ever since. Cail estimates that the newly introduced tax exemption could save him several hundred dollars each month, providing him with some financial relief to help cover transportation costs to visit his children on Cape Cod. "Right now, it is very hard," he shared, reflecting the struggles many caregivers face.
Currently, approximately 60,000 PCAs in Massachusetts support around 50,000 residents with disabilities who qualify for MassHealth and require assistance with daily activities like bathing and dressing. While the state does not have a precise estimate of the potential tax revenue loss due to this initiative, officials believe it will be relatively minimal.
The need for PCA services is expected to grow, especially as the population of adults aged 85 and above is projected to more than double in Massachusetts by 2050, according to research from the UMass Donahue Institute. The demand for home-care workers is part of a sector experiencing substantial job growth nationwide, as reported by PHI, an organization advocating for elder care and disability services.
Rebecca Gutman, who serves as the vice president of homecare at 1199SEIU—an organization representing PCAs—expressed that the tax exemption will provide much-needed assistance to caregivers struggling to make ends meet. Many of these workers rely on programs such as SNAP (Supplemental Nutrition Assistance Program) and subsidized health care insurance. Given the looming cuts to food assistance and rising healthcare costs, PCAs already facing financial hardships are preparing for even greater challenges.
"Many of them are opting to forgo health insurance because they simply can’t afford it," Gutman explained. She also pointed out that immigrant caregivers who have been in the United States for less than five years are losing access to MassHealth coverage entirely. While the tax exemption may not address all the issues these caregivers encounter, she views it as a positive step forward.
This article was produced by the Globe’s Money, Power, Inequality team, which focuses on the racial wealth gap in Greater Boston. To stay informed on these critical topics, you can subscribe to their newsletter.
For further inquiries, Katie Johnston can be contacted at katie.johnston@globe.com, and you can follow her on Twitter.
