Household Employee

Household Employee

An individual who performs nonbusiness services for the taxpayer in or around the taxpayer's home. Such services include child and dependent care, house cleaning, cooking, and yard work.
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To assist these families in understanding their responsibilities, Royal Consumer Information Products offers a ten-point checklist: Tips to Help Families Safeguard Household Employee Privacy
CPAs should review other federal and state filing requirements relevant to hiring a household employee, including
Do you have a household employee, such as a nurse, nurses' aide or other caregivers to account for on your taxes this year?
For more information about household employee taxes, call the Internal Revenue Service.
Designed to help protect and enhance the affluent lifestyle, these services include access to personal security consultants, travel safety experts, household employee advisers and collections management tools.
The Internal Revenue Service issued Notice 95-18 (1995-18 IRB-1), which says if cash remuneration paid to a household employee is $1,000 or more in a calendar year, all of the cash paid (including the first $1,000) to that employee is subject to FICA taxes.
File Schedule H (Form 1040) with your tax return if you paid cash wages of $1,400 or more in 2003 to a household employee.
Before these changes, anyone who paid a household employee wages of more than $50 in a quarter was required to file a quarterly report and pay Social Security and Medicare taxes on those wages.
For example, any regular Household employee who is a member of the reserves or National Guard and is called for emergency service continues to receive the difference between their full salary and benefits, including incentive, and any military pay, as long as they are on active duty.
Social Security taxes should be paid for each household employee receiving cash wages of $50 or more in a calendar quarter with Form 942.
A household employee outside the FUTA system may be included under state rules; CPAs advising household employers on unemployment tax responsibilities should know state law.

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