Household Employee Reporting

A household employee is someone a taxpayer hires to perform household work. A taxpayer falls under the household employee reporting requirements if a worker is hired to perform household work and is considered an employee.

Household work includes services performed in or around the house such as child care, health care, chauffeuring, housekeeping, and lawn care. A determination needs to be made whether the worker is an employee or an independent contractor. An employee would not control how the work is done, provide his or her own tools, and offer his or her services to the general public. A person who does those things would be an independent contractor. Hiring such a worker does not fall under the household employee reporting requirements. If there is doubt, simply file Form SS-8, Determination of Worker Status for the Purposes of Federal Employment Taxes and Income Tax Withholding, to request a determination from the IRS.

Because the taxpayer hiring a household employee is an employer, there is the potential for payroll taxes and wage reporting. Federal payroll taxes are reported on Schedule H, Household Employment Taxes. Wages are reported on a W-2, Wage and Tax Statement. If the household employer meets any or all of the filing requirements, the employer will need to file Form SS-4, Application for Employer Identification Number, to obtain an EIN.

Additional Resources:

2007 Instructions for Schedule H