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

38.2 Social Security and Medicare (FICA) Taxes for Household Employees

Income tax withholding is not required for a household employee (38.3), but generally you must withhold Social Security and Medicare (FICA) taxes from the employee’s cash wages and also pay the employer share of FICA yourself, unless the wages are below an annual threshold, which for 2012 is $1,800. You report and pay the FICA taxes on Schedule H, which you must attach to your Form 1040; see 38.3. If you pay the household employee cash wages of less than $1,800, the wages are not subject to FICA taxes.

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Caution

W-2 Distribution Deadline

Even if you request an extension to file copies of Form W-2 with the Social Security Administration, you must still furnish Form W-2 for 2012 to each employee by January 31, 2013.

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Once payments to a non-exempt employee (38.1) equal or exceed $1,800 in 2012, the entire amount, including the first $1,800, is subject to FICA taxes. The $1,800 threshold may be increased for 2013 by an inflation adjustment.

Tax rates.

If in 2012 you pay your household employee cash wages of $1,800 or more, you are liable for (1) Social Security taxes at the rate of 10.4% (6.2% for you and 4.2% for your employee) on wages up to the annual Social Security wage base, which for 2012 is $110,100, and (2) Medicare taxes at a rate of 2.9% (1.45% for each of you) ...