What an adult family home's books should show after Bolina
For most adult family homes the books were a way to get to a tax return. Since July 2026 they are also the evidence of what caregivers were paid, for which hours, and what that did to the home's finances. Here is what to record, and how.
Why the books matter more than they did
On 9 July 2026 the Washington Supreme Court decided Bolina v. AssureCare Adult Home LLC, striking down the Minimum Wage Act exemption for live-in caregivers at adult family homes. Live-in caregivers are now owed minimum wage for the hours that count as work, and overtime beyond 40 in a week.
The Adult Family Home Council has estimated that this adds somewhere between $70,000 and $150,000 a year for a home. That is a range across homes rather than a figure for yours, but it shows the size of the change: caregiver pay is now the largest moving part in the budget, and it needs to be visible in the books.
Give caregiver wages their own accounts
If every payroll payment lands in one “wages” line, you cannot see the effect of the ruling. Set up separate accounts, or at least separate tracking, for:
- regular wages for compensable hours,
- overtime,
- the employer’s payroll taxes and insurance premiums on those wages,
- and any back-pay or adjustment payments, kept apart so they never get mixed into ordinary pay.
Record each pay run in the period it was earned, tied to the payslips. When someone later asks what a caregiver was paid in a given month, the answer should be one report, not a search through bank statements.
Keep income by source
A home usually receives money from more than one place: residents or their families paying privately, and in many cases payments connected to publicly funded care. Record each source separately, with the payer named, rather than as one “income” total.
That lets you reconcile what you billed to what arrived, spot a payment that never came, and show, if you are asked, where the money for a given month actually came from. It also means a change in one source does not disappear into the total.
Does it reach backwards?
Whether the ruling applies to pay periods before the decision is still being decided by the trial court, and nobody can honestly tell you today how it lands.
What the uncertainty means for the books is simple. If clean records exist for the periods you can still control, you are in a far better position whichever way the question is answered. Whether to set money aside for a possible liability is a decision for you and an employment lawyer; the books’ job is to make the numbers available so that decision is made on facts.
A monthly routine that holds up
- Reconcile every bank and credit-card account to its statement.
- Categorise every transaction; leave nothing in “uncategorized”.
- Check that payroll expense for the month agrees with the pay runs.
- Record income by source and compare it with what you billed.
- Produce a profit and loss statement and read the wage line against last month.
- File receipts and supporting documents by month.
Done monthly, this takes a small part of the time a year-end rebuild does, and it means a tax preparer, lender or lawyer can work from your books as they are.
This guide is general information, not legal, tax or accounting advice, and it does not create a professional relationship. Clear Filings is an independent service provider and is not affiliated with or endorsed by any government agency. Speak to a qualified adviser about your own circumstances.
Common questions
Do I need to change my chart of accounts because of Bolina?
You do not have to, but splitting wages into regular pay, overtime, employer taxes and any adjustments makes the ruling's effect visible and keeps the records usable if you are ever asked about a past period.
Should I set money aside for possible back pay?
That is a decision for you and an employment lawyer, because whether the ruling reaches earlier pay periods is still undecided. The books can show what was paid and when, which is the information the decision rests on.
How long should I keep my records?
The IRS generally says to keep records that support a return for at least three years from filing, and employment tax records for at least four. Washington requires payroll records, including hours and rates, to be kept for at least three years.
Can you keep books for a home that is behind?
Yes. Catch-up and cleanup of earlier months is part of our bookkeeping service, scoped and quoted once we have seen the records.
Get the books in order
We keep books for Washington businesses, including adult family homes, and tie wage entries to the pay runs. Tell us about your home and we will come back with a monthly figure.
Request a bookkeeping quote