Household Employees
Many State’s unemployment funds are severely underfunded and are unable to cover the unprecedented employment benefit claims. In addition, the Federal government is coordinating efforts to combat unpaid employment taxes and the misclassification of workers. The federal government (and most states) do not classify nannies, housekeepers, maids, drivers, caregivers, and other similar employees, as independent contractors. These workers are considered domestic employees subject to the Department of Labor employment rules and payroll taxes. The following are some definitions to keep in mind when hiring a household employee:
- You have a household employee if you hired someone to do household work where you can control not only what work is done, but how it is done. If the worker is your employee, it doesn't 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 doesn't matter whether you pay the worker on an hourly, daily, or weekly basis, or by the job.
- If only the worker can control how the work is done, the worker isn't 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.
If you would like more information regarding household employees, you can visit the IRS website or call our office to discuss your individual situation.
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