Household Worker paid by siblings

[tonyd66]

My siblings and I are thinking about paying for a household worker for our Aunt who is on Medicaid home based waivers.  If we each end up paying $2300 or less to the household worker, do we need to withhold taxes?

[DawnC]

No.  You're not required to withhold federal income tax from wages you pay to a household employee.  However, if your employee asks you to withhold federal income tax and you agree, you'll need a completed Form W-4, Employee's Withholding Certificate from your employee.  See Publication 15-T, Federal Income Tax Withholding Methods for tax withholding tables that are updated each year.

Topic No. 756 Employment Taxes for Household Employees

[tonyd66]

Thanks, I have heard something similar to that.  I understand correctly, if I pay the household worker $2,300 or less at my Aunts and then my sister pays the household worker $2300 or less at the same Aunt's, then neither of us would have to withhold taxes?  Maybe I didn't phrase it quite correctly.

[PattiF]

You would be required to file a Schedule H if you paid a worker more than $2,300 during the tax year. This form is used to figure out the household employment taxes that you would pay.

Here is a TurboTax help article about Schedule H. Here is more detailed information from the IRS.