Palco Payroll for New Mexico Caregivers: How SDCB and New MexiCare Payments Work

What Palco Does

Palco is the Fiscal Management Agency (FMA) that processes payroll for self-directed caregivers in New Mexico. If your family member is getting paid through either the Self-Directed Community Benefit (SDCB) under Turquoise Care or the New MexiCare program, Palco handles the money.

Specifically, Palco:

• Enrolls the caregiver as an employee
• Processes program-specific timesheets and payments
• Handles applicable federal and state withholding and payroll taxes
• Issues paychecks or direct deposit payments
• Files employer tax returns on behalf of the Employer of Record (EOR)

The member or their designated EOR is technically the employer. Palco acts as the administrative backend so families do not have to navigate payroll tax law on their own.

Getting Set Up

SDCB Enrollment

After the member has completed 120 days on Agency-Based Community Benefit and elected SDCB, the Support Broker initiates the Palco enrollment process. The caregiver needs to provide:

• A completed Palco enrollment packet (provided by the Support Broker)
• Government-issued photo ID
• Social Security card
• Completed W-4 (federal tax withholding)
• Completed New Mexico W-4 (state withholding)
• Direct deposit authorization form (or request paper checks)
• Cleared background check and caregiver registry screening

The background check is a separate step from Palco enrollment — it must be completed and cleared before Palco will process any hours for that worker.

New MexiCare Enrollment

New MexiCare uses the same Palco infrastructure but the enrollment comes through the ALTSD rather than an MCO. The caregiver documentation requirements are similar. The New MexiCare care coordinator provides the enrollment forms.

Submitting Hours and Getting Paid

Electronic Visit Verification

All SDCB personal care hours must be logged through New Mexico's Electronic Visit Verification (EVV) system. The caregiver records the start and end of each shift using the approved mobile or telephony method; mobile check-ins may use location verification.

EVV data feeds into Palco's payroll processing. If a shift is missing or incorrect, report it promptly; the program may allow a documented manual correction, subject to its rules and approval.

Timesheet Processing

Palco processes timesheets on a regular cycle. The exact schedule depends on the program — SDCB timesheets typically run biweekly. Timesheets must be submitted by the cutoff deadline for each pay period. Late or incomplete submissions can delay payment; use the current program instructions for the applicable cutoff.

Follow the program's current timesheet instructions for required signatures and submission. If a required signature is missing, payment may be delayed until the timesheet is corrected.

Tax Withholding

Palco handles payroll and may issue a W-2, but a W-2 does not by itself mean every payment is taxable for federal income-tax purposes. Tax treatment can depend on the program, employment arrangement, and any applicable Medicaid-waiver exclusion. Applicable federal and state withholding and Social Security/Medicare treatment also depend on those rules and the worker's setup; review the pay documents or ask a tax professional.

Troubleshooting Payment Delays

The most common reasons for delayed caregiver pay through Palco:

Incomplete EVV records. Missing clock-in or clock-out entries. Fix: check the approved EVV method after every shift to confirm both entries registered, and report missing entries promptly for any permitted correction.

Incomplete timesheets. Required signatures or other information may be missing. Fix: follow the current program instructions and submit the completed timesheet by the applicable cutoff.

Incomplete background-check requirements. If a required background check or registry item is incomplete, enrollment or payment can be delayed. Fix: ask the Support Broker which checks and renewals apply, and keep the required records current.

Budget exhaustion. SDCB budgets are finite. If the member's approved allocation is exhausted, additional hours may not be payable until the budget is replenished or the care plan is revised by the MCO. Fix: work with the Support Broker to monitor budget burn rate monthly.

For Palco customer support, call 1-866-710-0456. For issues that Palco cannot resolve — like MCO authorization problems or budget allocation disputes — escalate through the MCO care coordinator or the HCA.

For a full walkthrough of setting up SDCB from the initial ADRC call through Palco enrollment, see our New Mexico home care guide.

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