If you would like to care for your parents full-time, or close to it, and your parents want to pay you for this, then there are some tax issues that you need to be aware of.
Most importantly, if you are providing hands-on care, making meals, doing the shopping, taking your parents to doctors’ appointments, etc., then you are an employee (as opposed to an independent contractor). And if you are an employee, then there are some rules that you need to comply with.
First, you and your parents need to report your income. Second, you and your parents need to pay taxes (they pay employer taxes, you pay income taxes). Now before you throw something at your computer screen, consider this: You want to pay payroll taxes. Why? Because FICA earnings will translate down the road into your own retirement Social Security check. Spending years working but not contributing to FICA can result in a lower Social Security check when you eventually retire. Same goes for Social Security Disability (SSDI) if you become disabled before 65.
Also consider this: Your parents can recapture part of the employer taxes they are paying in the form of a tax deduction – If they spend more than 7.5% of their AGI (adjusted gross income) on health care, then they can deduct health care costs. If they are paying for your many hours of care, in addition to other out-of-pocket health care costs, it is quite likely that they are spending over 7.5% AGI on those costs.
The payroll requirements for an employer are detailed. Rather than asking your parents to try to keep the records and handle the reporting to the IRS and DOR themselves, it is exponentially easier to hire a payroll company to take care of all the details for you. One payroll company working exclusively for home care situations is Care.com/homepay. I haven’t worked with them, but I think they are the only payroll company focusing on home care.
You can read here about what goes into a caregiver contract, and you can read here about how your parents can end up in big trouble later with MassHealth if they pay you without a caregiver contract in place.