If you pay a household employee cash wages of more than the amount specified by law ($1600.00) in a tax year, you generally must withhold social security and Medicare taxes from all cash wages you pay to that employee. (Cash wages include wages you pay by check or money order.) Unless you prefer to pay your employee’s share of social security and Medicare taxes from your own funds, you should withhold a certain percentage set by law from each payment of cash wages.
You are not required to withhold Federal or State income tax from wages you pay to a household employee. However, if your employee asks you to withhold Federal and State income tax and you agree, you will need Form W-4 and Form CT W-4.
If you pay a household employee cash wages of more than the amount specified by law ($1000.00) in a tax year, you have to pay FUTA taxes.
- Obtain Federal Identification Number – http://www.irs.gov/
- Form SS-4 application
- Register with Department of Labor – http://www.ctdol.state.ct.us/
- Register with CT Department of Revenue Services – http://www.ct.gov/drs/site/
- Payroll Taxes
- Have individual employees complete the following:
- Quarterly Payroll Reports required
- Annual Filings Required
- W-2 Series
- Schedule H on individual income tax return to report employee income and payroll taxes
- Make payroll tax withholding payments
- through quarterly estimated taxes or
- additional withholding from pensions, etc
See IRS Pub 926 for complete federal obligations and requirements.
IRS CIRCULAR 230 Disclosure: Under U.S. Treasury Department regulations, I am required to inform you that, unless expressly indicated, any tax advice contained in this email, or any attachment hereto, is not intended or written, to be used, and may not be used to (a) avoid penalties imposed under the Internal Revenue Code (or applicable state or local tax law provisions) or (b) promote, market, or recommend to another party any tax-related matters addressed herein.