Payment for respite care is taxable income; providers will have taxes deducted from their earnings. ... Each respite provider that is receiving payment must complete a W-9 tax form prior to providing care.

Is income from respite care taxable?

Generally, paragraph 81(1)(h) of the Income Tax Act (the Act) exempts from income, social assistance payments to the caregiver for the benefit of a cared-for individual under the caregiver's care.

Do I need to issue a 1099 to a caregiver?

If the caregiver is an independent contractor and is paid $600.00 or more in one calendar year, then the employer would be required to give the caregiver a form 1099-MISC, which is a miscellaneous income reporting of what has been paid to the caregiver. ... The employer must keep the Form I-9 for his records.