No-Fault attendant care benefits provide payment meant for the person taking care of an injured car accident victim to compensate them for their time and labor. Because these benefits are considered income, they are taxable. Like PIP, it doesn’t matter if these benefits are collected over time to pay for attendant care services or all at once. Even if the attendant being paid is a family member, the income is still taxable. However, these benefits may be exempted from FICA and FUTA taxes.
It should be noted, however, that some CPAs and Tax attorneys do not believe that attendant care benefits should be treated as income. If you are an attendant care provider, your best course of action is likely to talk to an advisor that you trust.