On February 7, 2008, Susan Green hired Helen Maple to clean her house every Wednesday. Susan did not have a household employee in 2007 and had no household employees other than Helen during 2008.
Susan paid Helen $50 every Wednesday for her day's work. Susan decided not to withhold Helen's share of the social security and Medicare taxes from the wages she paid Helen. Instead, she will pay Helen's share of these taxes from her own funds. Susan did not withhold federal income tax because Helen did not give her a Form W-4 to request withholding and no withholding is otherwise required. Susan also did not pay Helen advance earned income credit payments because Helen did not give her a Form W-5.
Helen was employed by Susan for the rest of the year (a total of 46 weeks). The following is some of the information Susan will need to complete Schedule H, Form W-2, and Form W-3.
|Helen's total cash wages||$2,300.00|
| || ||($50 x 46 weeks)|
|Helen's share of the:|| |
| ||Social security tax||$142.60|
| || ||($2,300 x 6.2% (.062))|
| ||Medicare tax||$33.35|| |
| || ||($2,300 x 1.45% (.0145))|
|Helen's total cash wages each quarter:|| |
| || 1st quarter||$350.00 ($50 x 7 weeks)|
| || 2nd quarter||$650.00 ($50 x 13 weeks)|
| || 3rd quarter||$650.00 ($50 x 13 weeks)|
| || 4th quarter||$650.00 ($50 x 13 weeks)|
|Amount included in box 1 of Form W-2 and Form W-3:|
| ||Cash wages||$2,300.00|
| ||Helen's share of social security tax paid by Susan||142.60|
| ||Helen's share of Medicare tax paid by Susan||33.35|
Because Susan paid less than $1,000 per quarter to household employees during 2007 (no employees) and 2008 (see above), she is not liable for FUTA tax.
See Pub 926 for an example showing how to complete Schedule H and Forms W-2 and W-3 if the employer withheld social security and Medicare taxes from the employee's wages.