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HCPF says IRS private letter ruling allows difficulty-of-care tax exemption under Community First Choice
Summary
The Colorado Department of Health Care Policy & Financing announced an IRS private letter ruling confirming live‑in caregivers can apply the difficulty‑of‑care federal income tax exemption under the state’s Community First Choice (CFC) program; memos and resources will be posted for providers and members.
The Colorado Department of Health Care Policy & Financing (HCPF) said an IRS private letter ruling confirms that live‑in caregivers serving members under Community First Choice (CFC) can apply the same federal difficulty‑of‑care (DOC) income‑tax exemption that previously applied to waiver programs.
HCPF staff told the Community First Choice Council that the agency asked the IRS in February 2025 whether the exemption would carry over when the state moved direct‑care…
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