Not Sure How Medicaid Waiver Works for Taxes?We Help AFH Owners Avoid Big Tax Mistakes.
Many CPAs do not know that certain Medicaid waiver payments can be tax-free for Adult Family Homes.
If this is filed wrong, you can overpay thousands in taxes every year.
We make the rules easy to understand, and we file your taxes correctly.
Why AFH Owners Get Confused
Medicaid waiver rules are not simple.
Most AFH owners are unsure because:
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CPA doesn’t understand Notice 2014-7
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Medicaid waiver income mixed with other income
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AFH bookkeeping categories are wrong
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Not sure what part is tax-free
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Fear of doing it wrong
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Missed deductions every year
This confusion leads to overpaying taxes — but we help fix that.
What I Help You Understand
I make Notice 2014-7 simple and clear.
I explain:
✔ What part of Medicaid waiver is tax-free
So you don’t pay tax on money the IRS says you don’t owe.
✔ How Medicaid waiver should show on your tax return
Correct reporting protects you long-term.
✔ What goes on Schedule C and what does NOT
Simple, step-by-step guidance.
✔ How to separate Medicaid waiver from other AFH income
(Done by explaining categories — not doing your bookkeeping.)
✔ What expenses can still be deducted
Even when the income is tax-free.
✔ How wrong filing affects loans, refinancing, and IRS notices
Your numbers must make sense to banks AND to the IRS.
WHAT I DO NOT DO
To keep your AFH clean and compliant, I:
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Do not do your bookkeeping categories
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Do not create your payroll
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Do not recode Medicaid payments line-by-line
Instead, I:
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Review your situation
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Tell you if Medicaid waiver was filed wrong
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Guide what needs to be fixed
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File your taxes correctly
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Help amend past wrong returns if needed
This keeps your business safe and avoids tax problems.
Why Correct Medicaid Waiver Reporting Matters
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When Medicaid waiver (Notice 2014-7) is filed wrong, you can face:
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Paying tax you don’t owe
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IRS mismatch letters
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Incorrect 1099s
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Problems during refinancing or selling
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Messy Profit & Loss reports
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Higher taxable income
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Losing thousands every year
Correct filing protects your money and your AFH.
Frequently Asked Questions
What is Notice 2014-7?
It is an IRS rule that says some Medicaid waiver payments are tax-free.
Are ALL Medicaid payments tax-free?
No. Some are tax-free, some are not. We explain the difference.
Can I still deduct expenses if the income is tax-free?
Yes. Many AFH owners can still deduct certain expenses.
My CPA never talked about this. Is that common?
Yes. Many CPAs do not know AFH rules. We specialize in them.
Can I fix old tax returns if Medicaid was filed wrong?
Yes. We can amend past returns and help recover overpaid taxes.
Does this work for both WA and OR?
Yes. We serve AFH owners in Washington and Oregon.
