Caregives-w-2's from state-no social security withholding

[mastertaxguy]

1. 2 different taxpayers receive a w-2 from state of michigan dhs/medicaid for services as a caregiver.
2. W-2 does not show any fica or medicare withholding.
3. In one case, federal withholding is shown, but not the other.
4. In both cases, box 14 has notation "household employee."
5. Ein number is for state of michigan dept. Of human services/dhs.
6. Questions: Does taxpayer have to pay fica/medicare taxes?
7. Next question: What is the significance of the "household employee" notation in box 14?
8. Final question: Neither taxpayer is a health care proessional or trained to be a caregiver. Thoughts as to this being a 'hobby income' situation and filing a statement with irs?
Thank you.

[Burke]

How much are the W-2 incomes? If paid less than $1,800 per year, no FICA/MC requirement.

[Lion]

Were they caring for a relative or friend and not doing this for a living, multiple clients?

[mastertaxguy]

Each of the 3 w-2's is for more than $2400.00
None of the caregivers are related to the person receiving care. They are neighbors or acquaintences form a local church.
Good points: wish I had included them originally in teh scenario.

[Bees Knees]

4. In both cases, box 14 has notation "household employee."
5. Ein number is for state of michigan dept. Of human services/dhs.
6. Questions: Does taxpayer have to pay fica/medicare taxes?
7. Next question: What is the significance of the "household employee" notation in box 14?

FICA is not withheld for a household employee unless paid $1,800 or more during 2012. If paid more, it is subject to FICA, unless the employee is under age 18, or the employer has some special situation where the income is exempt from FICA at all levels, such as certain government jobs or the railroad. Since this employer is the State of Michigan, I wouldn't worry about it.

As far as the taxpayer is concerned, if income is reported on a W-2, the employee never has to worry about paying FICA on the tax return, unless there are un-reported tips.

8. Final question: Neither taxpayer is a health care proessional or trained to be a caregiver. Thoughts as to this being a 'hobby income' situation and filing a statement with irs?
Thank you.

What good would treating the income as hobby income do? You still have to pay income tax on it.

[joanmcq]

Household employee: could the employer be reporting FICA on Sch H? And whomever is doing the W2s has only half a clue, because they prepared the W2s only half correctly.

[mastertaxguy]

Caregiver receives w-2-no fica/medicare withheld

thanks. Problem is IRS has the W-2 now. (I know: Social Security has it and IRS will have it later.).

[Burke]

That does not mean it cannot be corrected if it is wrong.