Household Employee

[S T]

A question

Son is going to hire a "live-in" caregiver for Parent which would consist of an hourly wage, plus room-board.

How do we arrive at "Wages" the Given factor is the per $ hourly rate say $ 10 per hour, what is the value of the Room-Board rate?

Do we reflect the Room-Board rate in the W-2 and Sched H and collect Payroll Taxes on?

Sandy

[appelman]

If providedfor employer's convenience

"You can exclude the value of lodging you furnish to an employee from the employee's wages if it meets the following tests.

It is furnished on your business premises.

It is furnished for your convenience.

The employee must accept it as a condition of employment."

The same applies to meals. For a household employee, it is usually pretty easy to meet these criteria.

[S T]

Thanks Appleman for your info,

All of those tests are met

Convenience of the Employer (Household)

Furnished at the T/p residence (Household for Care Giving)

Household Employee accepted lesser $ per hour for the Room and board add on (let's say $ 10 per hour versus $ 15 per hour) Would be 8 to 10 hours per day??

So given those facts, T/P would only have to report the hourly wages without regard to the $ value of the room/board.

Trying to cover this as it is for a Senior with Dementia and cognitive Impariment that needs Caregiving and the Son is thinking about a "live-in"

Sandy

[Burke]

Also check into the state unemployment tax and workmen's comp rules which may come into play. The WC premium can be really expensive. Dealt with this for 3-4 years for a stroke victim whose spouse worked. All was deductible for medical expense on Sche A. He did his own payroll (paid the caregivers & withheld FIT/FICA/SIT), sent in quarterly state reports for income tax & SUTA, we did federal on Sche H.

[JG EA]

A note on worker's comp. I was inquiring and signing up a household employee for a client. The WC guy was giving a quote and working to sign us up. I found a statement in their information that excluded household employees. He said "Oh - OK".

[S T]

Thanks all! Yes I know about the Calif SUI-ETT tax and registering - This is a Calif Client- and Federal will be handled through Sched H - Form 1040 along with Estimated Tax Payments.

They have requested that I set up the payroll and handle all of the Associated Payroll Calculations.

The taxpayer (my client) that referred this client is the Insurance Broker - and we did discuss the the Work Comp - so the New potential Client will have to investigate that cost along with associated payroll costs.

I just was not sure on how to handle - if the caregiver, was a "live-in" with Room and Board.

Sandy