Household Employees

Ensure compliance with tax laws when employing household workers. This guide details the responsibilities for household employers, including withholding and paying Social Security and Medicare taxes (FICA), federal unemployment tax (FUTA), and potentially federal income tax. It also explains the classification of household employees versus independent contractors and the necessary documentation.

Highlights:

• FICA Taxes: Requirements for withholding and paying Social Security and Medicare taxes for household employees earning $2,700 or more in cash wages annually.

• FUTA Tax: Overview of federal unemployment tax obligations and exemptions.

• Employee Classification: Clarifications on who qualifies as a household employee versus an independent contractor.

• Wage Exemptions: Specifics on wages not counted towards FICA and FUTA taxes, including payments to spouses, children under 21, and parents.

• Recordkeeping: Essential documentation, including filing Schedule H (Form 1040) and issuing Form W-2.