caregiver filing status

[Caregiver102]

I am a caregiver that was hired by an individual to care for her mother with dementia. I was issued a 1099-NEC that lists my patient as the payer even though she is a total care patient. I do not control my schedule, pay, or supply the materials needed. I also do not advertise or offer my services to the general public. Was I supposed to be issued a 1099-NEC? Shouldn't the person that actually pays me be responsible for issuing me a W-2 and their name listed as the employer? Also, I was not given the 1099-NEC before January 31st and my employer stated that they did not report the income on their taxes. Will I be penalized or held responsible for my employer not withholding taxes or reporting the income they paid me?

[Vanessa A]

It depends.  If you were paid more than $2,800 then you should not have been given a 1099-NEC instead, you should have been given a W-2.  In this case, the employer would have been responsible for paying half of the social security and medicare taxes. 

Yes and no, if you report the income on the 1099-NEC as self-employment income and you will be responsible for the SE taxes which are 15.3%.  Because you did not pay them, you would have an underpayment penalty. 

First, you should contact your employer to explain that they should have given you a W-2 and that you would have been considered a household employee. If they do not agree you can include form 8919 with your return.  You can do this by following the steps below.  This will tell the IRS that you should have been paid as an employee, not an independent contractor. 

You can also file form SS-8 to get a definite answer from the IRS. 

 

1. Income
2. Miscellaneous Income
3. Other Income not already reported on a Form W-2 or 1099
4. Yes, to did you receive any other wages
5. Continue through until you get to Any Other Earned Income and select Yes
6. Select Employee compensation that was not reported on a W-2
7. Continue through answering the questions.  Put a checkmark in the box that says you received a 1099-NEC
8. Select letter H- I received a form 1099-NEC that should have been submitted on a W-2

TurboTax will then include form 8919 with your return for uncollected Social Security and Medicare wages.  This will have you pay 7.65% instead of 15.3%.  

 

[Caregiver102]

I did try to discuss it with my employers. I was terminated. Basically if I agree to file as self employed I can keep my position, but if not then I would be let go and issued my w-2 but any taxes owed on it would be my responsibility is what I'm being told. 

[ThomasM125]

You would only owe your portion of Social Security and Medicare tax which is 7.65% of your gross wages, plus income taxes which you would owe anyways. The employer is required to withhold your social security tax and Medicare tax and pay it to the government. They can request that you reimburse them for that (the 7.65%), but they can't compel you to pay it since they didn't withhold it from your pay. You are not required to report it or pay it in when you file your personal tax return.