My wife recieves paid parent income for taking care of our medically disabled son 8 year old son who needs 100% care for all functions. I was told that this income is not to be claimed as income but nobody can tell me how? She does get a W2 for this from the provider that pays her through the county. I was also told that her former salary compared to what she currently makes doing this could be claimed as a loss? it is a significant income change, almost $40000 less per year. The problem is that her paid parent income is taxed at a low rate, she only makes about $17000 per year doing it, but when i entered that income on my tax return I go from getting a return to owing over $2000 (before other standard deductions). Please help. We do pay a "parental fee" of $6536.28 per year to be eligible for Medical Assistance which opens op the option for paid parent and other benefits. I dont know what I can and cannot claim here or how to do it. Please help.