Elder care 1099 vs. household employee

[FEDUKE404]

Who "owns" the Schedule H expenses ??

I'm not necessarily saying you are wrong, but it just doesn't sit right with me.

As for the "Do you have a household employee?", the first sentence says "If you hired someone to do household work and you could control what work he or she did and how he or she did it, you had a household employee."

In my example scenario, it is ME that hired somebody and I have control over what she does, not you.

Again, I'm not necessarily saying you are wrong, but it doesn't make sense to me.

I think you are splitting hairs. (I think the "you" being referenced is the resident/care receiver and not simply the bill payer. . .) The relevant factor is whether a person works IN A HOUSEHOLD and not who pays the bills and/or arranges for the services. Consider the given scenario slightly modified where the father is mentally incapable of "hiring" or "paying" anyone. . . I would assume (!) a Schedule H is still relevant.

OTOH, I guess you could take the opposite approach and put all of the provider's income on your personal Schedule H, and then pay a bunch of additional income taxes yourself.

My exposure to Schedule H is minimal, but I have had a handful of clients who file same. W2s are required for some, and not for others as a result of the amounts paid. Mental acuity and/or physical weakness are factors with each person receiving the in-home services. As mentioned before, the bulk of the services do NOT cross the threshold to be deemed valid "medical" expenses for IRS deduction purposes. I also personally have Schedule H exposure for someone who assists my spouse. To simplify things, we try to keep the annual expenses below the $2k/$1k Schedule H limitation amounts. The person receiving the payments reports the income on line 7 of Form 1040, with the proper "HSH & $$$" shown to the left of the line 7 amount.

I could easily be wrong on the entire matter, but I researched things pretty well several years ago. There are likely other TTB members with more underlying knowledge on this matter, so perhaps some of them will chime in?

FE

[TaxGuyBill]

I think I found it. :-) §3121 defines "wages" for purposes of FICA. §3121(a)(7) is discussing Household Employees and says "in a private home of the employer". Then Regulation §31.3121(a)(7)-1(a)(2) really seems to confirm it:


Domestic service in a private home of the employer. Services of a household nature performed by an employee in or about a private home of the person by whom he is employed constitute domestic service in a private home of the employer. A private home is a fixed place of abode of an individual or family. A separate and distinct dwelling unit maintained by an individual in an apartment house, hotel, or other similar establishment may constitute a private home. If a dwelling house is used primarily as a boarding or lodging house for the purpose of supplying board or lodging to the public as a business enterprise, it is not a private home. In general, services of a household nature in or about a private home include services performed by cooks, waiters, butlers, housekeepers, governesses, maids, valets, baby sitters, janitors, laundresses, furnacemen, caretakers, handymen, gardeners, footmen, grooms, and chauffeurs of automobiles for family use. The term “domestic service in a private home of the employer” does not include the services enumerated above unless such services are performed in or about a private home of the employer. Services not of a household nature, such as services performed as a private secretary, tutor, or librarian, even though performed in the employer's home, are not included within the term “domestic service in a private home of the employer”. As used in this section, the term does not include domestic service in a private home of the employer performed on a farm operated for profit or service not in the course of the employer's trade or business. See paragraph (f) § 31.3121(g)-1 for provisions relating to domestic service in a private home of the employer performed on a farm operated for profit.

https://www.law.cornell.edu/cfr/text/26/31.3121(a)(7)-1

[TaxGuyBill]

Sorry, it's not letting me edit my prior post to add this:

So I read it as it is not a Household Employee situation. We would then need to see if it fits anything else in §3121. It's rather long-winded, but at first glance, I don't see anything that would classify it as "wages".

https://www.law.cornell.edu/uscode/text/26/3121

[FEDUKE404]

Not a residence ? ?

I don't know where you're going in this rat maze. . .bring in the lawyers, I guess.

It appears you are now separating the rules for a "private residence" from those of a "boarding house."

If you think dad is living in a boarding house, ergo no "household employee," then go for it.

My position was / is that if dad is living in his own home and has "help" come in to assist with housekeeping, cooking, errands, physical care, etc that activity constitutes **HIS** household employee(s) and consideration of a Schedule H and associated paperwork. If Santa Claus arranges for the workers and/or pays their salary, nothing changes the underlying fact.

I'm outta here on this topic. The tired horse is nearing its demise. . .

Good luck.

FE

[oceanlovin'ea]

probably a technicality But

If taxguybill pays someone to come in to clean, cook and care for FEDuke's house and children, taxguybill may have hired this person and he may pay this person, but FEDuke is going to have a say in what is cooked and how the house is cleaned and how the children are cared for. So he has a household employee and should file a schedule H. Who pays isn't the relavant point here, in my opinion.

For example, I have hired people to stay with my 95 year old mother. I hired the people. I write the checks to them from her account. I tell them when to be there and what they are to do. BUT she also tells them what to do....all the time. lol She has household employees and I have to add the Schedule H to her tax return. I think I am the one in control and so does she.

Linda, EA

[Burke]

I agree with that!!!