Household Employer's Tax Guide

For Wages Paid in 2005

Taxmap/pubs/p926-000.htm#TXMP6831cb21 Important Reminders

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Social security and Medicare wage threshold is $1,400.

The social security and Medicare wage threshold is $1,400 for 2005. This means that if you pay a household employee cash wages of less than $1,400 in 2005, you do not have to report and pay social security and Medicare taxes on that employee's 2005 wages. For more information, see Social security and Medicare wages under Social Security and Medicare Taxes on page 3.

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Photographs of missing children.

The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Introduction

The information in this publication applies to you only if you have a household employee. If you have a household employee in 2005, you may need to pay state and federal employment taxes for 2005. You generally must add your federal employment taxes to the income tax that you will report on your 2005 federal income tax return.

This publication will help you decide whether you have a household employee and, if you do, whether you need to pay federal employment taxes (social security tax, Medicare tax, federal unemployment tax, and federal income tax withholding). It explains how to figure, pay, and report these taxes for your household employee. It also explains what records you need to keep.

This publication also tells you where to find out whether you need to pay state unemployment tax for your household employee.

Taxmap/pubs/p926-000.htm#TXMP51236875 Comments and suggestions.

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Taxmap/pubs/p926-000.htm#TXMP41f6562a Do You Have a Household Employee?

Household Employment

You have a household employee if you hired someone to do household work and that worker is your employee. The worker is your employee if you can control not only what work is done, but how it is done. If the worker is your employee, it does not matter whether the work is full time or part time or that you hired the worker through an agency or from a list provided by an agency or association. It also does not matter whether you pay the worker on an hourly, daily, or weekly basis or by the job.

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Example.

You pay Betty Shore to baby-sit your child and do light housework 4 days a week in your home. Betty follows your specific instructions about household and child care duties. You provide the household equipment and supplies that Betty needs to do her work. Betty is your household employee.

Taxmap/pubs/p926-000.htm#TXMP47af264a Household work.

Household work is work done in or around your home by the following people.

• Baby-sitters
• Cleaning people
• Drivers
• Housekeepers
• Nannies
• Health aides
• Private nurses
• Maids
• Caretakers
• Yard workers
• Similar domestic workers

Taxmap/pubs/p926-000.htm#TXMP32e9cb4c Workers who are not your employees.

If only the worker can control how the work is done, the worker is not your employee but is self-employed. A self-employed worker usually provides his or her own tools and offers services to the general public in an independent business.

A worker who performs child care services for you in his or her home generally is not your employee.

If an agency provides the worker and controls what work is done and how it is done, the worker is not your employee.

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Example.

You made an agreement with John Peters to care for your lawn. John runs a lawn care business and offers his services to the general public. He provides his own tools and supplies, and he hires and pays any helpers he needs. Neither John nor his helpers are your household employees.

Taxmap/pubs/p926-000.htm#TXMP7c35b6a3 More information.

More information about who is an employee is in Publication 15-A, Employer's Supplemental Tax Guide.

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