Are you planning to pay a cleaner, cook, gardener, babysitter or other domestic worker at least $ 2,400 in 2022? If you want to pay at least $ 2,400 to one person during the year, which may include transportation, meals, and housing, you have additional financial responsibilities to consider.
When paying at least $ 2,400 in wages to a domestic worker, do all of the following:
- Subtract Social Security and Medicare taxes from these salaries.
- Pay these taxes to the Internal Revenue Service.
- Report your salary to Social Security.
Accurate reporting is important as employees earn credits for Social Security benefits and Medicare coverage. You can currently earn Social Security or Medicare credit for every $ 1,510 in salary reported. In general, people need 10 years of work to qualify for:
- Pension benefits (as early as age 62).
- Disability benefits for the worker and the relative of the worker.
- Survivors’ benefits for the worker’s family.
- Medicare benefits.