Forms 1099 and
the Nanny Tax - Who should NOT issue Forms 1099 to health care
The so called Nanny tax is nothing more than payroll tax
applicable to non-business employers. A non-business
employer is typically an individual who hires another to perform
services most often in a residential location.
Contrary to a common
misconception, Forms 1099 are not issued by non-business
entities to report wages subject to the Nanny tax.
If you employ someone in your
home, you should apply for an identification number with the IRS
to establish yourself as an "employer." It is possible to
obtain the number online at irs.gov.
Generally, an employer must withhold and match Social Security
(FICA) and Medicare taxes for a household employee, including
health care workers, if the employer has paid the employee cash
wages during the calendar year at least equal to $1,900 for
2014. Employers are
not required but can voluntarily withhold Federal income tax.
An employer must also pay
Federal Unemployment Taxes (FUTA) if it has paid aggregate cash
wages of $1,000 or more to household employees in a calendar
quarter. In New Hampshire,
the same threshold applies for State Unemployment Taxes (SUTA). Other states may have
different thresholds. See
the U.S. Department of Labor's website at http://www.workforcesecurity.doleta.gov/unemploy/agencies.asp
to see what your state's requirements are.
Prior to January 31 of the following year, you must
provide a Form W-2 to your employee.
You pay the
Nanny Tax (Federal income, FICA and Medicare withholdings and
FUTA) when you file Schedule H with your Form 1040. If you are not filing a
Form 1040 return, mail a completed Schedule H and payment to the
IRS by April 15.
If you have
any questions, do not hesitate to contact the professionals at
Dana S. Beane & Company, P.C
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