Social Security Tax

[minli98]

Hi,

If an employer pays the employee portion of the SS and Medicare tax, is that amount considered an income to the employee and the gross income should be adjusted accordingly? My feeling is yes, but just want to make sure.

Thank you.

[WhiteOleander]

Yes. And if you have the Taxbook CD, there is a "Tools" section. Then there is an area for fill-in worksheets. Then there is a worksheet to "Gross-up" the wages by the SS/Med. I used this several times this past season and it is really nifty!

If you don't have the CD, you might be able to find a worksheet by googling. Try "gross up wages worksheet" and see if something comes up

[ChEAr$]

Tool for the job

I haven't looked at any "tool" in the Tax Book, but simply use my office calculator.

One of my clients gives me monthly totals of checks paid to her mother, an employee.
I then take those totals and divide by .9235 to get 100$.
Oh, and not just for this client, but for another as well.

[Bees Knees]

TTB page 23-9 contains a gross-up computation worksheet for that very purpose.

[Lion]

Nannies

Around here it's common for a household employer to pay her nanny's share of SS/Med; i.e., no withholding at all. Then, W-2 Box 1 will be higher by the nanny's tax paid by her employer.

[Davc]

Note that the household employee rule is different than for other employees. For a Household employee the gross up is not subject to fica and medicare while it is for other types of employees.

[Burke]

For a household employee, those taxes are paid on Schedule H which is filed the following year. So is the W2 grossed up for the year wages are paid, or the following year when the taxes are paid?

[Davc]

The year the wages are paid.