Does 2014-17 apply to CFC PAS/Hab provided through Medicaid but not through a Waiver?

When Texas started offering PAS/Hab Hours through CFC (Community First Choice) as part of Medicaid for individuals with a disability, Texas also changed the PAS/Hab hours provided as part of the CLASS Medicaid waiver to be funded by CFC. If you look at a CLASS budget, you now see 2 totals – what is paid for by the Waiver & what is paid for by CFC.

This led me to wonder if the IRS Notice 2014-7 (that categorizes Medicaid waiver PAS/Hab provided to someone who shares your home as tax exempt) also applies to CFC hours that are not part of a Medicaid Waiver.

I sent this letter to the IRS person who drafted the Notice 2014-7:

The author responded with a phone call, which I sent notes about to a friend:

Here are the 2 letters she referenced:

201623003.pdf

201624012.pdf

My conclusion is that the Difficulty of Care exemption can apply to caregivers providing CFC hours in Texas.