@Opus 17 wrote:
@pk wrote:
@Astroboy2024 ,
Having read through this thread and generally agreeing with my colleague @Opus 17 , I have a slight different take on this situation.
You are correct that you don't have to issue a W-2 to your household " employee" but then you have to file Schedule-H.
The main difference of whom is an employee ( W-2 or Schedule-H ) and whom is a subcontractor ( 1099-NESC ) is really the control the employer exerts of how the work is done -- see below note from the IRS.
Hiring Household Employees | Internal Revenue Service (irs.gov)
Also please read the following ( at least peruse through so you are aware :(
p926.pdf (irs.gov)
Schedule H is not required when the household employee is the taxpayer's parent. Follow lines A, B and C on schedule H and the corresponding instructions.
Allow me to further clarify this.
If you employ a parent as a household employee, payment of household employee tax and filing schedule H is almost never required. Household employee wages paid to a parent are subject to HHE taxes and Schedule H requirements if both of these statements are true:
1. The child is under 18, or is over 18 but has a condition that requires adult care,
AND
2. The taxpayer is divorced without being remarried, widowed without being remarried, or living with a spouse who has a physical or mental condition and is unable to care for the child.
This is a bit weird, but it's how the instructions are written. Employing a parent as a gardener or cook is not subject to household employee taxes. Employing a parent as a nanny is not subject to household employee taxes if the taxpayer is married to a healthy spouse, or is a never-married single parent, but is subject to tax if the taxpayer is divorced or widowed or their spouse is ill. There must be some logic that Congress used when they created those laws, but I don't know what it was.
See page H-5 here, https://www.irs.gov/pub/irs-pdf/i1040sh.pdf
