@OxanaD wrote:
Thank you so much for this. Also please advise. My mom needs prove of income for marketplace insurance eligibility, that she is currently enrolled in. Can I continue to provide her with a W2 and file quarterly 941 with 0$ ss, medicare, income and unemployment tax if I wanted to?Pr may be you are familiar and to qualify for Marketplace insurance income prove document doesn’t have to be a W2 form?Thank you again very much
I believe that you can issue a W-2 if you want to. You would also be required to file form 941 (however, check your EIN documents. Some small employers are allowed to file a form 944 annually for all wages rather than a quarterly form 941, which form you need will be indicated with the document that issued the EIN). The wages are still not subject to any tax withholding, unless you and she wish to participate in voluntary withholding of state and federal income tax. You would check the box on line 4 to indicate that none of the wages are subject to social security or medicare tax. Form 941 can also be e-filed.
https://www.irs.gov/businesses/e-file-employment-tax-forms
Note that if you withhold state income tax, there will be a similar quarterly form for your state.
And of course, you need to file form W-2 and W-3 at the end of the year. There are online providers that will e-file this form for you for under $10.
Even if you file form 941 (with or without withholding federal income tax), you are not liable for household employee tax and should not include schedule H on your tax return next year.
I don't know enough about marketplace insurance, but it is possible that her tax return showing household employee wages on line 1b might be sufficient to show she is working, without a W-2.
