Author: UNKNOWN. AUTHOR

Publisher: Forgotten Books

Published: 2015-08-05

Total Pages: 108

ISBN-13: 9781332277506

Excerpt from Proposals to Simplify and Streamline the Payment of Employment Taxes for Domestic Workers: Hearing Before the Subcommittee on Social Security and Subcommittee on Human Resources of the Committee on Ways and Means, House of Representative, One Hundred Third Congress, First Session, March 4, 1993 The Honorable Andy Jacobs, Jr. (D., Ind.), Chairman, Subcommittee on Social Security, and the Honorable Robert T. Matsui (D., Calif.), Acting Chaiman, Subcommittee on Human Resources, Committee on Ways and Means, U.S. House of Representatives, announced today that the Subcommittees will hold a joint hearing on proposals to simplify and streamline the payment of Social Security and Federal unemployment taxes on domestic workers. The hearing will be held on Thursday, March 4, 1993, in room B-318, Rayburn House Office Building, beginning at 10:00 a.m. Testimony will be received from invited witnesses only. Background: Individuals who hire domestic employees such as babysitters, housekeepers, and yard workers are required to withhold and pay employment taxes when the worker's wages exceed certain thresholds. (Individuals who hire independent contractors to provide domestic services are excluded from these requirements.) For Social Security, the wage threshold is $50 per quarter; for Federal unemployment insurance, it is $1,000 per quarter. When the $50 threshold is reached, the employer must file a quarterly report (form 942) with the Internal Revenue Service, submitting with it the required Social Security tax for both the employer and employee. The employer must also provide the employee and the Social Security Administration with a wage and Tax Statement (form W-2) at the end of the year. When the $1,000 unemployment insurance wage threshold Is reached in any calendar quarter, the employer must file a report (form 940) with the IRS at the end of the year, submitting the required tax. In addition, employers of domestic employees must: notify employees who may be eligible for the earned income tax credit (EITC) of the existence of this credit; file and pay State unemployment insurance tax in each quarter In which the State unemployment insurance wage threshold (equal to the $1,000 Federal threshold in 45 States) is reached; withhold income tax if the employee requests it and the employer agrees; and, in some States, report wages paid to domestics to the State for purposes of State income tax. These requirements have recently come under criticism on two counts. First, originally enacted in 1950, the $50 Social Security threshold now triggers tax liability at a much lower level of real wages than it did four decades ago. As a result, employers who hire domestics sporadically or for brief periods become subject to tax. Second, as described above. Social Security tax liability triggers a myriad of both quarterly and annual employer reporting and withholding requirements. Some argue that these requirements so increase the difficulty of hiring a domestic that household employees are being forced into the underground economy. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.