Retired-Disability...Taxed? (pt 2)

[PowerDrive]

Am I supposed to, by law, file or take out taxes on my private duty carregivers? Thank you!

 

[loku]

Private duty caregivers

If the caregivers work for an agency or are self employed, you do not have to withhold tax for them. You would only have to do so if they were your employees, for example if you hired someone and directed their work.

 

[crager34]

Sorry...

Even if they were your employee's, you would not be "required" to withhold Income Taxes. If so, I would like to see the law that requires that.

 

[loku]

Internal Revenue Code

Here is the law:

Internal Revenue Code Sec. 3402(a)(1) IN GENERAL.--Except as otherwise provided in this section, every employer making payment of wages shall deduct and withhold upon such wages a tax determined in accordance with tables or computational procedures prescribed by the Secretary.

Internal Revenue Code Sec. 3403: The employer shall be liable for the payment of the tax required to be deducted and withheld under this chapter, and shall not be liable to any person for the amount of any such payment.

Treas Reg Sec. 31.3403-1: Every employer required to deduct and withhold the tax under section 3402 from the wages of an employee is liable for the payment of such tax whether or not it is collected from the employee by the employer. If, for example, the employer deducts less than the correct amount of tax, or if he fails to deduct any part of the tax, he is nevertheless liable for the correct amount of the tax.

 

[crager34]

Good post!! However, before you move past section 3402(a)(1), you should go to section 3402(ii)(B)Employees incurring no income tax liability Notwithstanding any othe provision of this section, an employer shall not be required to deduct and withhold any tax under this chapter upon a payment of wages to an employee if there is in effect with respect to such payment a withholding exemption certificate....." So, if the employee determines he/she is not liable, the employer is NOT REQUIRED to withhold.

Just for the heck of it, lets go to Title 26, Sec. 31.3402(p)-1 Voluntary withholding agreements (NOT A W-4) (a) In general. An employee and his employer may enter into an agreement...." (b)(1)(i) Except as provided in subdivision (ii) of this subparagraph, an employee who desires to enter into an agreement under section 3402(p) shall furnish his employer with Form W-4 (withholding exemption certificate).." MEANING - Only fill out the W-4 if you want the employer to take out Income taxes. If you don't want the employer to withhold, Give them a letter Titled Withholding Exemption Certificate that says your exempt. Again, this one is not a W-4.

 

[PowerDrive]

What constites an "employee..employer"

First, thank tou Craig & loku for your replies. I would like to know what constites an employerr, employee....?

I find my help from running ad's in the paper. I dont run a business though I do pay for their nursing services. Now, I dont or haven't been asked to deduct or wirthold taxes on anyone, nor have I been given any kind of exept certificate.

Nurse #1. "'Ann" a live-in. She helps me with dailly care (bathing, wound care, cooking etc.. in return for room, board and $250.00 weekly.

Nurses # 2 comes in 3 mornings aweek and one evening..

Does this help? Thanks again for your response.

"PowerDrive

 

[loku]

Classification of care persons

To answer the question of whether the nurses are subject to withholding as employees:

The IRS has not been consistent in its treatment of nurses engaged in private-duty work. For example, a National Technical Advice Memorandum issued as IRS Letter Ruling 9123005, dealt with a quadriplegic who hired a licensed practical nurse to perform the following duties: bathing, feeding, exercising, taking vital signs, personal hygiene, household chores, such as laundry, and tracking the patient's physical condition. The IRS said the nurse was performing domestic services as an employee

By contrast, in IRS Letter Ruling 9243016, a family hired two RNs and a LPN to care round the clock for a bedridden parent. The nurses were given written instructions and supplies, and the family had the right to change their methods as they saw fit. The IRS ruled that all of the workers were independent contractors, even though their duties appeared to be overwhelmingly domestic in nature. The ruling says the nurses were responsible for bathing, tube feeding, laundry, emotional and physical support, administering medicine, monitoring vital signs, and keeping the apartment clean.

Therefore, it is not certain how the IRS would classify your nurses. However, in either case, you are OK. If they are self-employed (independent contractors), you don’t have to withhold. On the other hand, if you are classified as household workers, you only need to withhold income tax if they ask you to and if you agree to do it. (IRS Publication 505)

 

[crager34]

In regards to the terms "employee" and "employer", we need to get away from the Websters definition of the two. This is because in a court of law, the court would be looking for the legal definition. However, In dealing with the terms here, you need to referr to the IRS code, Chapter 26, cause that deals with Individual Income Taxes.

The supreme court has ruled on three different definitions of the term United States. In regards to the use and purpose of the terms "employee" & "employer" here, the definition would look something like this (sorry I don't have the exact section where it's located or the case law): United States, when used in a geographical sense, includes the District of Columbia, Guam, Puerto Rico, America owned Samoa, U.S. Virgin Islands, possesions and territories thereof. Again...something like that. If a company is not in one of those catagories, it is not "within" the United States and is not an Employer. Therefore, there is not an Employee, but a WORKER.