Do you plan to pay a cleaning person, cook, gardener, babysitter, or other household worker at least $2,200 in 2020? This amount includes any cash you pay for your household employee’s transportation, meals, and housing. If you will pay at least $2,200 to one person, you have some additional financial responsibilities.
When you pay at least $2,200 in wages to a household worker, you must do all of the following:
- Deduct Social Security and Medicare taxes from those wages.
- Pay these taxes to the Internal Revenue Service (IRS).
- Report the wages to Social Security.
For every $2,200 in wages, most household employees earn credits toward Social Security benefits and Medicare coverage. To learn more about credits, see “How your household worker earns credits for Social Security” below. Generally, people need 10 years of work to qualify for:
- Retirement benefits (as early as age 62).
- Disability benefits for the worker and the worker’s dependents.
- Survivors benefits for the worker’s family.
- Medicare benefits.
You can learn more about reporting household worker income at www.ssa.gov/pubs/EN-05-10021.pdf.