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Household WorkersSSA Publication No. 05-10021, January 2009, ICN 454750 [View .pdf] (En Español) |
If you hire someone to work in your home, such as a cleaning person, a cook, a gardener or a baby sitter, both you and your employee should know about paying Social Security and Medicare taxes.
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What wages must be reported?If you pay a household worker $1,700 or more in cash wages during 2009, you must deduct Social Security and Medicare taxes and report the wages once a year. This includes reporting any cash you pay to cover the cost of the employee’s transportation, meals or housing. If you do not report the wages on time, you may have to pay a penalty in addition to the overdue taxes. |
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Are all household workers covered?When you pay a household worker $1,700 or more in cash wages during the year, the wages are covered by Social Security. However, special rules apply in the following situations. Contact any Social Security office for more information. |
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How to report wagesContact IRS about reporting requirements or forms. Employees there will tell you how to complete forms and when and where to file them. You can also see IRS Publication 926, Household Employer’s Tax Guide, www.irs.gov/publications/p926/index.html for information about what forms you need to file and when. But here are a few things you may want to know. Keeping records—For Social Security purposes, you need the names, addresses and Social Security numbers of all household workers and the amount of wages you paid them. Copy the Social Security number directly from each person’s Social Security card. If one of your employees does not have a card, he or she should apply for one at any Social Security office. Deductions for Social Security and Medicare taxes—The 2009 Social Security tax rate, for both employees and employers, is 6.2 percent on wages up to $106,800. The Medicare tax rate is 1.45 percent of all wages. Filing your report—Use your own federal income tax return (IRS form 1040) to report wages of $1,700 or more that you paid a household worker. As the employer, you pay your share of the Social Security and Medicare taxes, along with the taxes you withheld from the employee’s wages, when you file your return. Submitting a W-2 after the year ends—You also must give your household employee copies B, C and 2 of IRS form W-2 (Wage and Tax Statement) by January 31 after the year the wages were paid. Send copy A to the Social Security Administration by the last day of February. You can get this form and the instructions for completing it by contacting any IRS office or, if you have a personal computer with Internet access and a printer, you can use W-2 Online. W-2 Online is Social Security’s free electronic filing option for employers. With W-2 Online, you can access an electronic Form W-2, complete the form and submit it to Social Security over the Internet. The service even completes a Form W-3 (transmittal) for you. You also can print the copies your employee(s) need to file their taxes To get started, you’ll need to register for a PIN and password which you can do at the Business Services Online website: www.socialsecurity.gov/bso/bsowelcome.htm. For more information, including step-by-step instructions, go to www.socialsecurity.gov/employer/bsohbnew.htm. |
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How your household worker earns credit for Social SecurityHousehold work is credited somewhat differently from other work. Generally, a person earns one credit for each $1,090 of reported earnings (in 2009), up to a maximum of four credits for the year. However, a household worker will earn Social Security credit only for earnings of at least $1,700 from any employer. For example, a household employee who worked for three employers and was paid $600, $800 and $1,700 respectively (a total of $3,100) would receive only one Social Security credit with $1,700 posted
to his or her Social Security record.
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Contacting Social SecurityOur website is a valuable resource for information about all of Social Security’s programs. There are a number of things you can do online. In addition to using our website, you can call us toll-free at 1-800-772-1213. We can answer specific questions from 7 a.m. to 7 p.m., Monday through Friday. We can provide information by automated phone service 24 hours a day. (You can use our automated response system to tell us a new address or request a replacement Medicare card.) If you are deaf or hard of hearing, you may call our TTY number, 1-800-325-0778. We treat all calls confidentially. We also want to make sure you receive accurate and courteous service. That is why we have a second Social Security representative monitor some telephone calls. |
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