J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

38.1 Who Is a Household Employee?

If you hired someone to do household work in or around your home and you were able to control what work he or she did and how it was done, you had a household employee. This could include a babysitter, house cleaner, cook, nanny, yard worker, maid, driver, health aide, or private nurse. Unless an exception applies (see below), such a worker is your employee regardless of whether the work is full or part time or whether you hired the worker through an agency or from a list provided by an agency or association. Also, it does not matter if the wages were paid for work done on an hourly, daily, weekly, or per-job basis.

If a worker is your household employee, you may have to withhold and pay Social Security and Medicare taxes (FICA, 38.2) and pay federal unemployment tax (FUTA,38.4).

Workers who are not your employees.

Workers you hire through an agency are not your employees if the agency is responsible for who does the work and how it is done. If you use a placement agency that exercises control over what work is done and how it is done, the worker is not your employee. Self-employed workers are also not your employees; in addition to maintaining control over how their work is done, self-employed workers usually provide their own tools and offer services to the general public. For example, you need work done on your lawn and you hire the self-employed owner of a lawn care business, who provides his own tools and supplies and hires and pays any other ...