It depends. If the wife is considered as an independent contractor, then the husband will need to issue a Form 1099-MISC if Box 7 is completed and the wife's yearly income was $600 or more. A Form 1099-MISC is not required to be filed or furnish if the amount is less than $600. However, the wife is required to report her self-employed income on the Form 1040 Schedule C or C-EZ and claim any business expenses related to the self-employment income.
If the husband considers the wife has an employee, then he will need to provide her with a Form W-2. He will also need to prepare the applicable employment tax returns (e.g. Form 941, 940) that is related to the W-2 income. The reason is because the wife is subject to the applicable income tax withholding, Social Security and Medicare taxes if she is being treated as an employee.
To ensure that the husband is in compliance with the tax laws, he will have to carefully determine if his spouse is an employee or an independent contractor. I have provided an Internal Revenue Service link that will assist him in making the determination, Independent
Contractor (Self-Employed) or Employee?
