You are not required to withhold federal income tax from wages you
pay a household employee. You should withhold federal income tax only
if your household employee asks you to withhold it and you agree. The
employee must give you a completed
Form W-4,
Employee's Withholding Allowance Certificate.
If you and your employee have agreed to withholding, either of you
may end the agreement by letting the other know in writing.
If you agree to withhold federal income tax, you are responsible
for paying it to the IRS. Pay the tax as discussed under How Do
You Make Tax Payments?, later. Also, see What Forms Must
You File?, later.
Use the income tax withholding tables in Publication 15,
Circular E, Employer's Tax Guide, to find out how much to
withhold. Figure federal income tax withholding on wages before you
deduct any amounts for other withheld taxes. Withhold federal income
tax from each payment of wages based on the filing status and
exemptions shown on your employee's Form W-4. Publication 15
contains detailed instructions.
Wages.
Figure federal income tax withholding on both cash and noncash
wages you pay. Measure wages you pay in any form other than cash by
the fair market value of the noncash item.
Do not count as wages any of the following items.
- Meals provided to your employee at your home for your
convenience.
- Lodging provided to your employee at your home for your
convenience and as a condition of employment.
- Up to $65 a month for transit passes you give your employee,
or for any cash reimbursement you make for the amount your employee
pays for transit passes used to commute to your home. A transit pass
includes any pass, token, farecard, voucher, or similar item entitling
a person to ride on mass transit, such as a bus or train.
- Up to $180 a month for the value of parking you provide your
employee, or for any cash reimbursement you make for the amount your
employee pays for parking at or near your home or at or near a
location from which your employee commutes to your home.
See Publication 15 for more information on cash and noncash wages.
Paying tax without withholding.
Any income tax you pay for your employee without withholding it
from the employee's wages must be included in the employee's wages for
federal income tax purposes. It also must be included in social
security and Medicare wages and in federal unemployment (FUTA) wages.
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