Tax & Payroll Information
When you hire someone to work in your home, you become a household employer. California law states that if you pay any number of employees (temporary or permanent) more than $750 in a calendar quarter, you are required to file for a tax ID number and pay certain employer taxes required by California state. In addition, when you pay any individual candidate more that $1,900 in a year (or $2,000 per year starting in 2016), you are required to file for a federal tax ID and withhold and pay both state and federal taxes. Keep in mind that you cannot take advantage of the Child Care Tax Credit or Flexible Spending Account tax savings unless you have paid the candidate legally and paid all required employer taxes, at the time of the assignment.
According to the IRS, household employees may not be treated as contractors or so-called “1099” employees. See the section entitled “Do You Have a Household Employee” in IRS Publication 926.
California Notice Requirements
Form 2810.5. Under California law, any non-exempt employee must be given written notice of certain wage, salary and insurance information at the time of hiring. The same notice must be given to your employee (regardless of when they were hired) if any of the information on that form changes, for instance when you give your employee a raise, within seven calendar days of the change. You can download a copy of the Labor Code Section 2810.5 notice here. When needed, complete the form, make two copies, you and your employee should sign both copies, give one copy to your employee and keep one copy on file for your records. You do not need to file a copy with any state agency.
Paystubs. California employers must also provide a paystub each pay period that shows all of the following information:
- Gross wages earned
- Total hours worked during the pay period and the applicable hourly rate
- All tax withholdigs
- Net wages earned
- Dates included in the pay period
- Name of the employee and last 4 digits of their social security number or taxpayer ID
- Employer’s name and address
- Tax & Payroll Services
Payroll services. Town + Country has partnered with the HomePay payrolling service provided by Breedlove & Associates to assist families with easy solutions for their tax and payroll needs.
HomePay offers a complete solution:
- Account registration with the IRS and the state
- Pay stubs for each pay period detailing gross earnings and net pay and withholding’s
- Federal and state tax filings
- New hire reporting
- Correspondence with tax authorities on your behalf
- Monitoring of tax law changes
In addition, HomePay can provide guidance on tax breaks, assistance with unemployment insurance and disability claim processes, assistance with employee benefits (such as health care, worker’s compensation, etc.), help with budgeting, raises, bonuses, etc. And most importantly, full compliance which means complete peace of mind. One low fee covers everything you need.
To find out more about HomePay’s service & support, call them at 888-273-3356, visit their web site here, or register online at their secure registration page.
Download a printable W-4 Form.
