INSIGHTS & IDEAS

What you should know when employing household help

When hiring household help on a regular basis (once a week or more) such as a babysitter, housekeeper or caretaker/aide, you take on certain tax responsibilities as an employer.  First of all you are responsible to verify that each employee is eligible to work in the United States.  In addition, you must report to the New York State Department of Taxation and Finance certain identifying information within twenty days of the date of hire; you may have income tax withholding and reporting requirements with both the IRS and New York State Department of Finance; and, you may be required to pay applicable federal and state unemployment insurance and carry disability insurance.  The following is a partial list of your obligations:

 

 

1.                Complete U.S. Citizenship and Immigration Services Form I-9, employment eligibility verification no later than the first day of work.  You do not file this form but you must keep it for three years after the date the employee is hired or, one year after the date the employment ends, in order to verify the employee’s eligibility status to work in the United States.  http://www.uscis.gov/

 

2.                Obtain a Federal ID number by filing Form SS-4, application for employer identification number with the IRS.  http://www.irs.gov/

 

3.          You must complete Form NYS-100-New York State Employer Registration for Unemployment Insurance, withholding, and wage reporting.

 

4.         Have the employee fill out a federal Form W-4, employees withholding allowance certificate and within twenty days of the hiring date. Fax or mail this form to:

 

                            New York State                  

                            Department of Taxation

                            and Finance

                            P. O. Box 15119

 Albany, NY  12212-5119

 Fax: 518-320-1080 

 

You may also report this information electronically on their website:  www.nysnewhire.com

 

5.                If you pay cash wages totaling $500 or more in a calendar quarter, you are required to pay New York State unemployment insurance taxes by filing Form NYS-45 on or before each April 30th, July 31st, October 31st, and January 31st.  You may also use this Form to remit any income taxes you and your employee agree to have withheld from their wages.

 

6                  If you pay cash wages totaling $1,000 or more in any calendar quarter, you must also pay federal unemployment taxes.  Generally, federal unemployment taxes are remitted annually by filing Form 940 on or before each January 31st.

 

7.         If total annual wages paid exceed $2,000, you are liable for Social Security, Medicare and federal withholding taxes.  These taxes are generally paid as an add on tax to your individual income tax, by reporting and including this information on Schedule H attached to your federal Form 1040.

 

8.                Finally, you are required to provide each employee with a W-2 Form with a copy sent to the Social Security Adminstration on or before each January 31st. 

  

Failure to comply with these rules and regulations could result in significant sanctions and penalties.  The hiring of a domestic employee should not be taken lightly. 



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