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Community First Choice Resources

General Resources

Difficulty of Care Payments under CFC

Colorado implemented the Community First Choice (CFC) program on July 1, 2025. With this new program, select services were moved from 1915(c) Home and Community Based Services (HCBS) Waivers to 1915(k) Community First Choice. Under 1915(c) HCBS Waivers, select services qualified for Difficulty of Care (DOC) payments. 

In February 2025, the Department of Health Care Policy and Financing (HCPF) requested a Private Letter Ruling (PLR) from the Internal Revenue Service (IRS) asking for a decision on whether DOC payments are allowed under Colorado’s CFC program. HCPF received a favorable decision from the IRS on this request on December 12, 2025. The IRS indicated that payments for select CFC services to live-in caregivers can be considered DOC payments excludable from federal income tax under § 131 of the Internal Revenue Code.

While HCPF awaited a PLR from the IRS, many provider agencies and Financial Management Services (FMS) vendors began withholding income tax from caregiver wages paid under CFC in case the IRS ruling was not favorable. With this ruling, provider agencies and FMS vendors should reconsider this practice as income tax no longer needs to be collected from DOC qualifying wages.

An updated memo will soon be posted to the HCPF website with additional information. Since HCPF cannot provide legal or tax guidance, we recommend that you consult a tax professional with any additional questions. You can also visit the Colorado Department of Revenue website for low cost and free tax resources. 

 

Task Worksheet: Direct Care Services Calculator

The Community First Choice (CFC) Direct Care Services Calculator is used as the tool to establish direct care service needs within agency-based care settings, In-Home Support Services (IHSS), and Consumer-Directed Attendant Support Services (CDASS).

Task Worksheets used by CDASS and IHSS were modified to be used for all CFC Personal Care and Homemaker Services, including CDASS, IHSS, and Agency-based service delivery options. The Task Worksheets are also utilized for children and youth.

 

Department Guidance