Are You a Household Employee?

If you are paid to work in a home as a housekeeper, nanny, or care aide, you could be considered a household employee. One of the primary criteria would be if you only work for one employer. In this type of a situation, you would be expecting a W-2, just like any other employee. The complication would arise if your employer has not been taking out social security, federal, or state taxes. The employer would be liable for the social security taxes and would increase your gross income on your W-2 by the amount of social security taxes that you normally would have paid out of your check. But the federal and state taxes are all on you. Make sure you are prepared to write a check or have been making estimates.

If you have an employee in your home, whether to watch your children, clean your home, or, more commonly now, look after an elderly parent while you work, you will need to issue a W-2 before Jan 31st to that person. You should already have the person’s name, social security number and address. It would be a wise idea to have a professional prepare the W-2 for you. Otherwise, the forms are available from IRS or an office supply store. They CANNOT be download because the copy that must be mailed in is required to be an official IRS RED copy, and they don’t allow a downloaded version.

Note: if you are a parent who is being paid to take care of your adult disabled child, you will be free of FICA (social security and medicare tax) even if your wages exceed the threshold amount ($1,800 for 2013), but NOT income tax.


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