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"I am 68 yr old daughter of 96 yr old father. He is living independently with 96 yr old companion. He recently(4 months ago) started some dementia. He calls me almost every night asking about "his papers". His nightime confusion is extending to daytime."

His night time confusion is called Sundowning, a behavior related to dementia.

Are you his DPoA? This is the person who has the authority to make his medical and financial decisions. If he doesn't have a PoA, this needs to be created by him before he become too cognitively incapacitated to do so.
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Whomever you pay, friend, family or stranger, you give the normal W-2 form, and this is a matter, yes, of their having to pay taxes, this is reportable as your having paid, because you're otherwise in danger of claims of "gifting" if there is ever a lookback required for application for public funds. Keep careful records, files, whether you are doing this for yourself, spouse, whomever. There are IRS rules so go on their website. I believe it is some small amount you can pay out without telling the IRS, something like 100.00 if I remember.
If you need help with taxes then get it, because it is cheaper in the long run to pay for expert advice.
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