Schedule H - Household employee tax question

[NSNM]

A taxpayer paid less than $1700 cash wages to a household employee at the

rate of $400 per quarter in 2011.

Does the taxpayer NOT required to pay household employment tax and NOT file

Schedule H while filing Form 1040 ?

Does that mean household employee does not get credit on his social security record ?

[Roland Slugg]

Does (sic) the taxpayer NOT required to pay household employment tax and NOT file Schedule H while filing Form 1040?

Both of those statements are correct.

Does that mean household employee does not get credit on his social security record?

The HH worker's income will be credited on his lifetime SS record provided that he reports it on his own income tax return, on Schedule SE, as he is legally required to do.

[ChEAr$]

2 More items.

1 . Were state reports for SUTA filed if required?

2. Since over 1,000$, was not FUTA also involved?

[NSNM]

FUTA tax

Thank you Roland Slugg for the clarification.

Regarding FUTA tax, I read in TTB (page 14-1), the cash wages of $1000 or more
in any CALENDAR QUARTER of 2010 or 2011 would meet the test for FUTA tax.

If, in each quarter cash wages paid is less than $1000, I think no FUTA tax is due
for household employees (cleaning people, housekeepers, nannies, babysitters
age 18 or over). The case I referred has $400 in each quarter for a total of $1600.

States may have different wage limits for SUTA.

Thanks to ChEAr$ and Roland Slugg for your input.

[appelman]

Roland, can you provide a cite?

For your statement that household employees earning less than the W2 limit are REQUIRED to file Schedule SE?

[Gretel]

Here is what I think: Just because the household employee earns less than the limit for the employer to have to file Schedule H does not mean that this employee somehow now becomes an IC. If employee or IC is driven by who is in control of the work and where the work is performed. The IRS doesn't change the term "wages" when talking about employees earning less than the threshold, which actually makes me think this employee still should get a W-2 with nothing withhold (probably not).

Since wage under the FICA threshold limit are not subject to Fica (period!) such an employee should report the wages on line 21 and is out of luck for SS credits. I am curious if someone comes up with a backup for a different opinion.

[ChEAr$]

Wages are still reported on line 7, even in absence of a W-2 form. However no Social Security taxes are paid, let ALONE
se tax.

[appelman]

I agree with CHEAr.

Line 7, marked "HSH" (Don't ask!) and no Schedule SE or other FICA payment.