Important Tax Info: Are You a Household Employer?

Today, we're diving into a topic that might not be on your radar but is crucial when it comes to tax responsibilities: household employment.

Navigating whether or not you're considered a household employer can be tricky. It often boils down to the type of work being done for you, and things can get a bit complex because IRS and state regulations don't always align perfectly.

Let's break it down according to the IRS:

Definition of Household Employee: If you've hired someone to do household work and you control what work is done and how it's done, congratulations, you've got yourself a household employee! This applies whether they work full-time, part-time, or were hired through an agency.

Examples of Household Work: Think tasks performed in or around your home like babysitting, caregiving, housekeeping, gardening, and more.

Workers Who Aren't Your Employees: Now, if the worker can control how the work is done, they're considered self-employed, not your employee. This distinction is pretty important for tax purposes.

Now, if you're in California, listen up! The state has its own strict criteria for defining household employees. This includes positions like babysitters, housekeepers, maids, gardeners, pool maintenance folks, and more.

And here's where things get real: If you're a household employer in California and you're paying cash wages of $750 or more in a calendar quarter, you need to register with the Employment Development Department (EDD) and possibly start paying state payroll taxes. Yep, it's a whole process.

But don't worry, we've got your back! At Ethical Money Matters, we understand how important it is to stay compliant with tax regulations, and we're here to assist you every step of the way. Whether you're unsure if you qualify as a household employer or need a hand with registration, don't hesitate to reach out to us at support@ethicalmoneymatters.com.

We're here to help you navigate these matters smoothly and effectively.