Show Babysitter Users May Need To Pay Taxes Ta es Anyone who pays wages for household help such as a babysitter or housekeeper may be subject to social security tax and federal unemployment FUTA FUT A tax according to the Internal Revenue Service s IC If a household employee is paid cash wages of 50 or more during a calendar quarter those wages are subject to social security tax the IRS says Both the employer and employee pay a sh share re of the tax The e employer must withhold the thee e employees employee's portion of the tax from the ilie employees employee's wages For 1987 the social security tax rate is percent for the the employer and also for the employee The employer reports and pays the ilie social security tax four times a year on Form Employers Quarterly Tax Return for Household Household Household House House- hold Employees The form has instructions for filling it out and a table to determine how much tax to withhold Anyone who pays cash wages of 1000 or more to household employees in any calendar quarter in the current or preceding year generally is liable for FUTA FlIT A tax for employees' employees unemployment insurance The FUTA tax is imposed on the employer The rate is 62 percent of the first of cash wages paid to each employee during the calendar year The employer must file Form Employers Annual Federal Unemployment FUTA FUT A Tax Tax Return If a household employee requests income tax withholding and the employer agrees the employer must withhold income tax based on the ilie employees employee's Form W 4 or Form W Employees Withholding Allowance Certificate Publication 15 15 Circular E Employers Employer's Tax Guide explains how to figure the amount to withhold Keeping good records of wages paid as well as taxes withheld and paid is extremely important for household employers according to IRS More information about the tax responsibilities of household employers is in free IRS Publication Child and Dependent Care Credit and Employment Taxes for Household Employers To get forms or publications call 1 1040 or the IRS tax forms number listed in local telephone directories under under US U.S. Government |