A personalized care contract has three basic conditions for a person to pay a family member for care: January 31 – Form W-2 is used to report gross salary and deductions. An employer must complete this caregiver form at the end of the year in order to submit taxes and provide the caregiver with copies B, C and 2. In addition, Form W-2 Copy A and Form W-3 (Transmission of Salary and Tax Returns) must be submitted to the SSA either electronically or on paper. To submit Form W-2 and Form W-3 electronically, which is free of charge, click here. Paying a caregiver as an employee can be more complicated and expensive than an independent contractor, but it`s the right way to recruit a caregiver who is a staff member from the aforementioned testing criteria. Knowing that you`ve done the right job gives you security in an already stressful situation. Once the payment and reporting methods are in place, maintaining the weekly process is simple. Later, in this series, we`ll look at how payments are made to an employee or independent contractor, and we`ll provide and explain some recent online applications that can be used to simplify payday tasks. Article I provides a method for designating both the participants in this Agreement and identifying each other`s role in relation to the other. Before we begin, we must document the date of this contract by indicating the month and calendar day of the contract date on the first space and the year on the second space.
If the caregiver is an employee, it is the employer`s responsibility to withhold, transfer and pay certain taxes if the caregiver`s salary exceeds a certain annual amount, currently $1700.00. The employer must withhold income tax and caregivers` share of Social Security and Medicare taxes. In addition, the employer is responsible for paying Social Security, Medicare, and unemployment taxes (FUTA and SUTA) on the caregiver`s salary. The employer is responsible for paying the worker`s share of the tax if the employer fails to withhold it correctly from the worker`s wage. If the salaries of all employees in the household represent USD 1,000.00 or more in a calendar quarter, Schedule H must be submitted before the end of the month following the end of the quarter. If the employee earns $1700.00 or more per year, the employer must provide the guardian with a Form W-2, which is a payroll and tax return showing the amount of wages earned and taxes withheld from the employee`s salary. In addition, the employer is required to submit copies of the W-2 to the Social Security Administration and the State Department of Revenue, if applicable. Trying to pay someone as an independent contractor if they are actually employed is not legal and can result in severe penalties for misrepresentation. Federal and state penalties can be imposed and you can be held liable for tax that your caregiver has not paid if they have not filed tax returns. . .
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