Publication 926 - Household Employer'S Tax Guide

Advance EIC payments. You must make advance EIC

ployment taxes, as well as your income tax. You can pay

payments if your employee gives you a properly completed

the additional tax in any of the following ways.

Form W – 5, Earned Income Credit Advance Payment Cer-

•

Ask your employer to withhold more federal income

tificate. Use the advance EIC payment tables in Publica-

tax from your wages in 2003.

tion 15, Circular E, Employer’s Tax Guide, to find out how

•

much to pay your employee.

Ask the payer of your pension or annuity to withhold

Reduce the social security and Medicare taxes and

more federal income tax from your benefits.

withheld federal income tax you need to pay to the IRS by

•

Make estimated tax payments for 2003 to the IRS.

any advance EIC payments you make. See Publication 15

•

for more information about making advance EIC pay-

Increase your payments if you already make esti-

ments.

mated tax payments.

Notice about the EIC. Copy B of the 2003 Form W – 2,

Wage and Tax Statement, has a statement about the EIC

You may be subject to the estimated tax penalty if

on the back. If you give your employee that copy by

you did not pay enough income and household

February 2, 2004 (as discussed under Form W – 2, later),

employment taxes during the year. (See Publica-

CAUTION

tion 505, Tax Withholding and Estimated Tax, for informa-

you do not have to give the employee any other notice

about the EIC.

tion about the penalty.) However, you will not be subject to

If you do not give your employee Copy B of the Form

the penalty if both of the following situations apply to you.

W –2, your notice about the EIC can instead be any of the

•

You will not be subject to federal income tax with-

following items.

holding from your pay, pension, annuity, etc.

•

1) A substitute Form W –2 with the same EIC informa-

You would not be required to make estimated tax

tion on the back of the employee’s copy that is on

payments if you did not owe household employment

Copy B of the Form W – 2.

taxes.

2) Notice 797, Possible Federal Tax Refund Due to the

Earned Income Credit (EIC).

Asking for more federal income tax withholding. If you

are employed and want more federal income tax withheld

3) Your own written statement with the same wording

from your wages to cover your household employment

as in Notice 797.

taxes, give your employer a new Form W –4, Employee’s

If a substitute Form W – 2 is given on time but does not

Withholding Allowance Certificate. Complete it as before,

have the required EIC information, you must notify the

but show the additional amount you want withheld from

employee within one week of the date the substitute Form

each paycheck on line 6.

W –2 is given. If Form W – 2 is required but is not given on

If you receive a pension or annuity and want more

time, you must give the employee Notice 797 or your

federal income tax withheld to cover household employ-

written statement about the 2003 EIC by February 2, 2004.

ment taxes, give the payer a new Form W –4P, Withhold-

If Form W – 2 is not required, you must notify the employee

ing Certificate for Pension or Annuity Payments (or a

by February 9, 2004.

similar form provided by the payer). Complete it as before,

You must give your household employee a notice about

but show the additional amount you want withheld from

the EIC if you agree to withhold federal income tax from the

each benefit payment on line 3.

employee’s wages (as discussed under Do You Need To

Get Publication 919, How Do I Adjust My Tax Withhold-

Withhold Federal Income Tax, earlier) and the income tax

ing, to make sure you will have the right amount withheld. It

withholding tables show that no tax should be withheld.

will help you compare your total expected withholding for

Even if not required, you are encouraged to give the

2003 with the combined income tax and employment taxes

employee a notice about the EIC if his or her 2003 wages

that you can expect to figure on your 2003 return.

are less than the EIC eligible maximum amount (see the

Form W –5 instructions for the 2003 maximum amount).

Paying estimated tax. If you want to make estimated tax

payments to cover household employment taxes, get

Form 1040 –ES, Estimated Tax for Individuals. You can

How Do You Make

use its payment vouchers to make your payments by

check or money order. You may be able to pay by direct

Tax Payments?

debit (automatic withdrawal) or credit card. See the form

instructions for details.

When you file your 2003 federal income tax return in 2004,

You can pay all the employment taxes at once or you

attach Schedule H, Household Employment Taxes, to

can pay them in installments. If you have already made

your Form 1040. Use Schedule H to figure your total

estimated tax payments for 2003, you can increase your

household employment taxes (social security, Medicare,

remaining payments to cover the employment taxes. Esti-

FUTA, and withheld federal income taxes). Add these

mated tax payments for 2003 are ordinarily due April 15,

household employment taxes to your income tax. Pay the

June 16, and September 15, 2003, and January 15, 2004.

amount due by April 15, 2004. (For more information about

using Schedule H, see Schedule H under What Forms

Payment option for business employers. If you own a

Must You File, later.)

business as a sole proprietor or your home is on a farm

You can avoid owing tax with your return if you pay

operated for profit, you can choose either of two ways to

enough tax during the year to cover your household em-

pay your 2003 household employment taxes. You can pay

Page 7

Publication 926 - Household Employer'S Tax Guide - 2003 Page 7

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