Employment classification?

Forum|Forum|3 years ago
November 16, 2022
1 reply
8 views

For taxes, is it better to be an employee or a private subcontractor to work for a family member as a live-in home caregiver? Please advise.

DavidT0202

Level 5

Hi @Calypsographx

The term independent caregiver is commonly used to describe a home care professional who does not work for an agency. According to the IRS, if a privately hired / independent caregiver is paid more than $2,100 per year (in 2019), they are considered a household employee, not an independent contractor. Thus, the family hiring the independent caregiver takes on all the responsibilities of being an employer, which includes payroll and taxes. The relationship of the person to the person being cared for does not matter in this case.

The reason for this designation is because when one hires a caregiver, the employer has control over what time they arrive, their activities, etc. In contrast, an independent contractor has the freedom to choose what days and hours they work.

Please see this IRS publication for more information on Household employees.

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