Department of Social and Health Services s4

STATE OF WASHINGTON DEPARTMENT OF SOCIAL AND HEALTH SERVICES Aging and Long-Term Support Administration Home and Community Services Division PO Box 45600, Olympia, WA 98504-5600

HCS MANAGEMENT BULLETIN

H17-004– Policy & Procedure January 12, 2017

TO: Area Agency on Aging (AAA) Directors Home and Community Services (HCS) Division Regional Administrators Developmental Disabilities Administration (DDA) Regional Administrators

FROM: Bea Rector, Director, Home and Community Services Division Don Clintsman, Deputy Assistant Secretary, Developmental Disabilities Administration

SUBJECT: Tax reporting changes affecting Individual Providers

PURPOSE: To notify HCS, AAA and DDA staff of the process for Individual Providers to obtain certain payroll tax exemptions and to add two forms to the Individual Provider contractor intake packet.

BACKGROUND: Individual Providers may be exempt from the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA) depending on the Individual Provider’s relationship to the client. Some Individual Providers may also be exempt if they are working with specific visa types to provide domestic services.

Payments for Individual Providers transitioned from the Social Service Payment System (SSPS) to ProviderOne March 1, 2016. In SSPS, the FICA/FUTA exclusion was selected by the case manager using a service code specific to the Individual Provider’s relationship to the client. When authorizations for the provider-client pair were made consistently, with the correct service codes, the tax status for the provider-client pair was able to convert to IPOne. If there was any discrepancy in the service codes used in SSPS, the tax status for the provider-client pair was not able to convert to IPOne.

New providers and those providers not converted, must complete the IPOne form Application for Employment Tax Exemptions Based on Age, Student Status, and Family Relationship to have the FICA/FUTA payroll taxes calculated correctly. The authorization header in CARE has a relationship field that indicates the provider’s relationship to the client for training purposes. This field is not functional for tax reporting purposes at this time.

WHAT’S NEW, The Individual Provider must submit the IPOne form, Application for CHANGED, OR Employment Tax Exemptions Based on Age, Student Status, and Family CLARIFIED Relationship, for every client they serve. This form provides IPOne with the necessary information to calculate FICA/FUTA correctly. Providers were sent information about the FICA/FUTA exemption form with an IPOne Earnings Statement in November. For various reasons, not all providers have turned in the required form. The form is now to be provided to Individual Providers during the contracting intake process to ensure all providers receive the form. When Individual Providers begin work with a new client, case managers may remind Individual Providers to complete a form for the new provider-client relationship. For help completing the Application for Employment Tax Exemptions Based on Age, Student Status, and Family Relationship, Individual Providers can refer to the Payroll Tax Exemption Notice developed by Informing Families.

ACTION: Effective January 1, 2017, contracts staff will give Individual Provider’s the following during the contracting intake process:  Application for Employment Tax Exemptions Based on Age, Student Status, and Family Relationship  Payroll Tax Exemption Notice Case managers may remind providers to complete an additional Application for Employment Tax Exemptions Based on Age, Student Status, and Family Relationship when they begin work with a new client. Neither DSHS nor IPOne Call Center staff may give tax advice. Providers with questions about the form may call the IPOne call center at 844-240- 1526. Individual Providers may consult their tax adviser with questions about their specific tax status.

ATTACHMENT(S):

IPOne Application Informing Families FICA FUTA Tax for Tax Exemptions Payroll Tax Exemption Notice Information for Individual Providers.docx CONTACT(S): Stacy Graff, Individual Provider and Administrative Hearing Program Manager (360) 725-2533 stacy.graff @dshs.wa.gov

Dustin Quinn Campbell, Payment Policy and Systems Unit Manager (360) 725.2535 [email protected] Beth Krehbiel, Eligibility and Payment Systems Unit Manager (360) 407-1547 [email protected]

Jaime Bond, State Plan Services Unit Manager (360) 407-1567 [email protected]