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Form 941 and Household Employment Taxes

May 1, 2015

Household employment is a complex and highly-nuanced section of the tax code.  The requirements for household employers are unique to them, and individuals, CPAs, and payroll service providers who attempt to treat household employment taxes in the same way they’d handle business taxes run in to a host of problems. 

Form 941 is utilized by businesses for remitting quarterly federal tax payments; generally speaking, household employers are not a business as no commercial activity is happening in the home.  Accordingly, the IRS indicates through Publication 926 that federal household employment taxes should be completed on the 1040 estimated payment schedule.  The federal estimated payments made by households includes employee and employer Social Security and Medicare taxes (FICA), employee federal income taxes, and employer federal unemployment taxes. 

When household employment tax payments are incorrectly made using Form 941, the IRS may not apply the payments at all or may incorrectly apply the payments resulting in notices to the employer indicating large sums of money are due or that payments have been unapplied.  Household employers who had 941s filed will need to amend the 941 returns and transfer or resubmit the tax payments.  Between corresponding with the IRS, sorting through old filings, and amending past returns, this is a hassle that household employers are smart to avoid.

NannyChex ensures that all household employment taxes are made properly for our clients.  Not just the federal payments, but the local and state taxes as well.  We guarantee all of our work and if there ever is an issue with a tax agency or filing, we take care of it.  Since 1995, we have made paying household employees and filing the taxes as easy as possible.  We work exclusively with household employers and offer an affordable solution for domestic employers seeking to have their household employment taxes handled properly.  Contact us today at 877-626-6924 for a free consultation.



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