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rjcrosales
New Member

I am thinking of hiring my parent as a household employee. We don't have kids yet. Do I need to pay for my parent's employment tax (social security and medicare)?

 
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Accepted Solutions
TomD8
Level 15

I am thinking of hiring my parent as a household employee. We don't have kids yet. Do I need to pay for my parent's employment tax (social security and medicare)?

You don't pay Medicare and Social Security taxes on wages paid to your parent unless BOTH of the following conditions apply:

Condition One

Your parent cares for your child who is either of the following;

      1. Under the age of 18;

       2. Has a physical or mental condition that requires the personal care of an adult for at least 4 continuous weeks in the calendar quarter services were performed.

Condition Two:

 Your marital status is one of the following:

          1.  You're divorced and haven't remarried

          2.  You're a widow or widower

          3.  You're living with a spouse whose physical or mental condition prevents him or her from caring for your child for at least 4 continuous weeks in the calendar quarter services were performed.

https://www.irs.gov/publications/p926

Don't ask me who writes these rules.


 

           

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

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10 Replies
TomD8
Level 15

I am thinking of hiring my parent as a household employee. We don't have kids yet. Do I need to pay for my parent's employment tax (social security and medicare)?

You don't pay Medicare and Social Security taxes on wages paid to your parent unless BOTH of the following conditions apply:

Condition One

Your parent cares for your child who is either of the following;

      1. Under the age of 18;

       2. Has a physical or mental condition that requires the personal care of an adult for at least 4 continuous weeks in the calendar quarter services were performed.

Condition Two:

 Your marital status is one of the following:

          1.  You're divorced and haven't remarried

          2.  You're a widow or widower

          3.  You're living with a spouse whose physical or mental condition prevents him or her from caring for your child for at least 4 continuous weeks in the calendar quarter services were performed.

https://www.irs.gov/publications/p926

Don't ask me who writes these rules.


 

           

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
Hal_Al
Level 15

I am thinking of hiring my parent as a household employee. We don't have kids yet. Do I need to pay for my parent's employment tax (social security and medicare)?

No. A parent is specifically exempt from the "nanny tax". 

re_mousavi
New Member

I am thinking of hiring my parent as a household employee. We don't have kids yet. Do I need to pay for my parent's employment tax (social security and medicare)?

Following this conversation, I have a question: Can the parent/ parents that I employ to do housekeeping in my house, live in the same dwelling? Basically, can I hire them and let them live with us? Thanks much!

DMarkM1
Expert Alumni

I am thinking of hiring my parent as a household employee. We don't have kids yet. Do I need to pay for my parent's employment tax (social security and medicare)?

Not necessarily on the federal side, but you would also need to check with your state taxing authority.  Parents are listed as exceptions to counting wages for social security and medicare and unemployment tax withholding.  Here is the applicable IRS Publication.  See table 1 and then scroll down to the parent exception paragraphs. 

 

Yes they can live with you and be employed by you.  Also, you do not count as wages, lodging provided to your employee at your home for your convenience and as a condition of employment.

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vmalathi
Level 2

I am thinking of hiring my parent as a household employee. We don't have kids yet. Do I need to pay for my parent's employment tax (social security and medicare)?

I have a follow up question to this as I plan to employ my mother as a household employee and pay her around $15000.  As you say, I don't pay have to pay Medicare and Social Security taxes on wages paid to my mother.  However, what are her obligations?  Does she owe the entire 15% or her share only or nothing at all?  Thanks in advance.

Critter-3
Level 15

I am thinking of hiring my parent as a household employee. We don't have kids yet. Do I need to pay for my parent's employment tax (social security and medicare)?

Why do you want to report a gift as income at all ???    You can give anyone up to $16K per year without it being taxable to the receiver  or reported by the giver on a gift tax return. 

leeloo
Level 4

I am thinking of hiring my parent as a household employee. We don't have kids yet. Do I need to pay for my parent's employment tax (social security and medicare)?

What is your pupose for hiring your mother? Are you trying to give money to live on, or are you trying to make medicare contributions or are you trying to qualify her for ACA?

For the latter two, there has to be a legitimate employer/employee relationship. There can't be a situation where you are trying to have her qualify for benefits she truly is not entitled to receive.

vmalathi
Level 2

I am thinking of hiring my parent as a household employee. We don't have kids yet. Do I need to pay for my parent's employment tax (social security and medicare)?

My mother gets a pension amount of around $5000 per year from her service in India.  She lives with us now and helps with almost all the household work.   She is a US citizen and files taxes every year.  Because she has some assets, she does not qualify for MediCal, and because she does not have a minimum income she does not qualify for ACA.  I don't want her to work outside the house, so I want to pay her for the work she is doing at our household.   According to Pub 926, I don't have to withhold the taxes, but my question was related to how she would pay her taxes.   Does she have to pay the social security and medicare taxes every quarter or can she do it when she files taxes?  Do I have to do her wages through a formal payroll?  Any help is appreciated.

https://www.irs.gov/publications/p926#:~:text=Both%20you%20and%20your%20household,1.45%25%20for%20Me...).

leeloo
Level 4

I am thinking of hiring my parent as a household employee. We don't have kids yet. Do I need to pay for my parent's employment tax (social security and medicare)?

Since you are paying her with a W-2 and not withholding taxes, this means she is not responsible to pay SS and Medicare taxes. She is in a special category, being your parent who does household work.

vmalathi
Level 2

I am thinking of hiring my parent as a household employee. We don't have kids yet. Do I need to pay for my parent's employment tax (social security and medicare)?

Thank you!

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