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Level 1

Grossing Up Household Employee

My family just hired a household employee. We plan to pay the worker approx. $12,000 net pay annually, gross up to any employee FICA and income taxes, and to pay the employer FICA, FUTA, etc. 

 

Intuit Tax Caster says that the worker will likely get a refund if we gross up and withhold taxes. So my question is, can we simply pay the employer share of taxes and not withhold anything or only withhold very little from the employee's pay in order to avoid paying any grossed up withholdings that would just be refunded to the worker anyway? Would that cause any legal problems with the IRS?

2 Comments
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Level 6

Grossing Up Household Employee

Hi @razanoth

 

Welcome to the QB Community! It's great to see you posting here. 

 

I wanted to bring the following question about hiring household employees to your attention: Do you know how to be a household employer?

 

One of our great members, @Sangeethmathew, shared some relevant links in his answer there.

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Level 5

Grossing Up Household Employee

I recently hired a household employee, as well, and I found this to be super helpful in addressing my tax liability questions: https://www.irs.gov/taxtopics/tc756

 

Let me know if that helps with your circumstance and how you end up handling it. Thanks!

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