Employees who work in your household may qualify as Household Shifting Pune workers. If they qualify as household employees, you will be required to apply various taxation processes. The IRS provides qualifications for what determines household employees and also provides the guidelines on how to withhold various taxes from the workers’ wages. These details are explained below:
Not all people who work for you qualify as household employees. The IRS provides a guideline to check whether a worker qualifies as a household employee or as an independent contractor. According to the IRS, a household employee is any household worker for whom you control the amount of work that he or she does and how the work is done. You also provide the tools necessary for the work. The worker is an employee irrespective of the number of hours that he or she works for you or the payment structure. In most cases babysitters, cleaning people, drivers, caretakers, domestic workers, housekeepers, health aides, nannies, yard workers, maids, and private nurses will qualify as household employees. However, the dividing rule is whether you give these workers specific instructions as to what to do and how to do it.
If on the other hand, the worker defines the scope of work to be done, then they will be self-employed and you will not need to take any tax action. This applies to such people as gardeners who work on multiple lawns and who come with their own tools, plumbers, home repairs help, painters, and car mechanics. If you obtain your worker from an agency for whatever household services (including those who would otherwise qualify as household employees) and the agency determines the scope and procedure of the work, then such a worker does not qualify as a household employee. If you take your children to a childcare facility or to the house of the babysitter, then they also will not qualify as your employees.
For those who qualify as your employees, you will need to withhold Social Security and Medicare taxes from the wages to pay them. You will withhold these taxes if the wage amount is above $1,700.00 for 2009 and 2010, and $1,600.00 for 2008. You can choose to take up the tax burden and pay for the Social Security and Medicare taxes from your pocket. If you do so, such payments need to be included as part of their earned income for taxation purposes. However, these taxes that you shoulder on behalf of the worker do not need to be reported or deducted off any Federal unemployment wages or any Social Security and Medicare wages received.
You should also not withhold any taxes if the workers working for your household are your parents, your spouse, your children, any worker below 18 years of age, or any worker who is a student. To submit the Social Security and Medicare taxes, you will need to fill out both Form W-2, “Wage and Tax Statement Form” and the Form W-3, “Transmittal of Wage and Tax Statement Form.” You will need to provide the workers’ Social Security numbers and your Employer Identification Number (EIN). If you do not have an EIN, you can apply for one from the IRS website.
Besides Social Security and Medicare tax withholding, you may also be expected to pay Federal Unemployment Taxes based on various qualifications. You are, however, not expected to withhold Federal Income Taxes unless the worker explicitly requests you to withhold them.
