Publication 926 - Household Employer'S Tax Guide - 2003 Page 6
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18During 2003, you pay your household employee cash
Do not count as wages any of the following items.
wages of $10,400. You pay all the required contributions
•
Meals provided to your employee at your home for
for 2003 to your state unemployment fund by April 15,
your convenience.
2004. Your FUTA tax for 2003 is $56 ($7,000 × 0.8%).
•
Lodging provided to your employee at your home for
Credit for 2002. The credit you can take for any state
your convenience and as a condition of employment.
unemployment fund contributions for 2002 that you pay
•
Up to $100 a month for 2002 (see Publication 15 –B
after April 15, 2003, is limited to 90% of the credit that
for the 2003 amount) for transit passes you give your
would have been allowable if the contributions were paid
employee or for any cash reimbursement you make
on or before April 15, 2003.
for the amount your employee pays for transit
You must complete Worksheet A to figure the
passes used to commute to your home. A transit
credit for late contributions if you paid any state
pass includes any pass, token, farecard, voucher, or
contributions after the due date for filing Form
similar item entitling a person to ride on mass transit,
1040.
such as a bus or train.
•
Up to $185 a month for 2002 (see Publication 15 –B
for the 2003 amount) for the value of parking you
provide your employee or for any cash reimburse-
Do You Need To Withhold
ment you make for the amount your employee pays
for parking at or near your home or at or near a
Federal Income Tax?
location from which your employee commutes to
your home.
You are not required to withhold federal income tax from
wages you pay a household employee. You should with-
See Publication 15 for more information on cash and
hold federal income tax only if your household employee
noncash wages.
asks you to withhold it and you agree. The employee must
give you a completed Form W –4, Employee’s Withholding
Paying tax without withholding. Any income tax you
Allowance Certificate.
pay for your employee without withholding it from the
If you and your employee have agreed to withholding,
employee’s wages must be included in the employee’s
either of you may end the agreement by letting the other
wages for federal income tax purposes. It also must be
know in writing.
included in social security and Medicare wages and in
If you agree to withhold federal income tax, you are
federal unemployment (FUTA) wages.
responsible for paying it to the IRS. Pay the tax as dis-
cussed under How Do You Make Tax Payments, later.
Also, see What Forms Must You File, later.
What Do You Need To Know
Use the income tax withholding tables in Publication 15,
Circular E, Employer’s Tax Guide, to find out how much to
About the Earned Income
withhold. Figure federal income tax withholding on wages
before you deduct any amounts for other withheld taxes.
Credit?
Withhold federal income tax from each payment of wages
based on the filing status and exemptions shown on your
Certain workers can take the earned income credit (EIC)
employee’s Form W – 4. Publication 15 contains detailed
on their federal income tax return. This credit reduces their
instructions.
tax or allows them to receive a payment from the IRS. You
may have to make advance payments of part of your
Wages. Figure federal income tax withholding on both
household employee’s EIC along with the employee’s
cash and noncash wages you pay. Measure wages you
wages. You also may have to give your employee a notice
pay in any form other than cash by the fair market value of
about the EIC.
the noncash item.
Worksheet A. Worksheet for Credit for Late Contributions
A.
Enter the amount from Schedule H, line 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B.
Enter the amount from Schedule H, line 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C.
Subtract line B from line A. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . .
D.
Enter total contributions paid to the state(s) after the Form 1040 due date . . . . . . .
E.
Enter the smaller of line C or D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F.
Multiply line E by .90 (90%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G.
Add lines B and F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H.
Enter the smaller of the amount on line A or G here and on Schedule H, line 24 . .
Page 6
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