Thinking about starting a GoFundMe? Here’s what you need to know (2024)

Plain City resident Tim Campbellfinally received Medicaid funds for his injured wife, Koreen, only after the feds were able to scrutinize the $4,000-plus dollars he garnered from a GoFundMe account for her health care.

It's easy to set up aGoFundMe account, but more difficult to grasp the details of the online firm's terms of use. And it's important to understand the rules and regulations in the fine print. GoFundMe's Common Questionslisted on the siteare only answered in generic terms.

Nic Dunn, spokesperson for the Utah Division of Workforce Services, which administrates Medicaid, said the issues the Campbell family faced with verifying income through crowdfunding is not unusual. Because GoFundMe accounts are often designed to help defray much larger costs, many might not be aware they are considered income that needs to be tallied, he said.

Patrick Thomas, a patent attorney and associate director of technology commercialization at Weber State University, says most of us will have trouble with company legal jargon.

"I think it depends on the person. I suspect that many may not have the sophistication necessary" to know all the ins and outs, he said.

If you're thinking about setting up a GoFundMe account, here are some of the things to keep in mind:

ISSUES OF INSURANCE AND PUBLIC ASSISTANCE

Although a user should always check to make sure, Thomas doesn't think private insurance is much affected by GoFundMe accounts. Their rates are based on an individual's income earned.

However, public assistance such as Medicaid is affected by crowdfunding income.

"Most benefits that the federal government will provide to individuals (are) contingent on what funds the individual has," Thomas said. In addition to specializing in patents, Thomas also has expertise incontract, copyright, trademark, business and cyber law.

So if you're getting any federal assistance, make sure the bureaucrats know about your GoFundMe assets.

Dunn said assets garnered from a GoFundMe account are considered income if an individual is applying for Medicaid or any public assistance program.

"To determine eligibility, we're asking for income information," he said. A GoFundMe account certainly would count as an asset. If the money from the account was not listed, that would prompt Workforce Services to find out how much was raised and whether the money was spent for the specific purpose, Dunn added.

Dunn stressed the rules are different for various public assistance programs and urged anyone who plans to use Workforce Services for Medicaid or another service to go to the website jobs.utah.gov and take a pre-test to learn what about income-eligibility requirements.

On the site's home page, click on "Temporary Assistance," then on the particular program needed (such as Food Stamps, Medical, etc.). An individual can learn what Medicaid income requirements areand see more information on the state's Medicaid Policy Page.

TAX ISSUES

This is a crucial issue in regards to research, Thomas said. No one wants to face tax penalties for not reporting income.

On GoFundMe's common questions page, it says,"most donations on GoFundMe are simply considered to be 'personal gifts,' which are not taxed as income in the U.S." However, ordinary income over $600 must be reported to the IRS. Whether it's taxable at the federal level will depend on an individual's tax return. The same applies to states.

The best advice here, echoed by GoFundMe, is to"consult with a tax professional."

SAFETY AND PRIVACY ISSUES

These are the issues that can snare most individuals who choose to use crowdfunding sites, Thomas said. Any information that someone puts on a GoFundMe page, or any social media site, is fair game for hackers, identity thieves and predators.

"I think it's very reasonable to be concerned about digital footprints," Thomas said.

Despite all the due diligence that companies do to protect online information, preventing hacking is fluid; no company is completely secure.

"The Internet is designed to share information, not to secure information," Thomas said.

When setting up a GoFundMe account, avoid leaving personal information as much as possible, Thomas said. He acknowledged less detail may lead to a"Catch-22" situation, since more information may yield more donors, but the money might not be worth risking opening yourself or your family up to hackers.

Some"basic advice," says Thomas:

Avoid home addresses

Avoid posting phone numbers

Don't post photos of vehicles with license plates, children's schoolsor family members

Set up a dual-identification password, which is a password that prompts a text to your smart phone with another password to type into the computer.

• RELATED:Cache woman sentenced for faking brain cancer

And finally, Thomas offers some obvious advice for Go Fund Me users-- make sure you spend the money for the specific cause mentioned. Otherwise,"that would be fraud, and there are legal ramifications," including criminal, he adds. Lesley Jensen, of Nibley, was sentenced to a year in jail for fraud after faking brain cancer and soliciting money, including setting up a Go Fund Me account. She raise more than $3,000 from the Go Fund Me account.

To put it simply: don't go on a shopping spree for an account that's to pay bills for medical care. Keep those receipts -- you may need them.

Contact reporter Doug Gibson at dgibson@standard.net.