H. R. 4278

One Hundred Third Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Tuesday,

the twenty-fifth day of January, one thousand nine hundred and ninety-four

An Act

To make improvements in the old-age, survivors, and disability insurance program

under title II of the Social Security Act.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Social Security Domestic Employment Reform Act of 1994’’.

SEC. 2. SIMPLIFICATION OF EMPLOYMENT TAXES ON DOMESTIC

SERVICES.

(a) THRESHOLD REQUIREMENT FOR SOCIAL SECURITY TAXES.—

(1) AMENDMENTS OF INTERNAL REVENUE CODE.—

(A) GENERAL RULE.—Subparagraph (B) of section

3121(a)(7) of the Internal Revenue Code of 1986 (defining

wages) is amended to read as follows: ‘‘(B) cash remuneration paid by an employer in any

calendar year to an employee for domestic service in a

private home of the employer (including domestic service

described in subsection (g)(5)), if the cash remuneration

paid in such year by the employer to the employee for

such service is less than the applicable dollar threshold

(as defined in subsection (x)) for such year;’’. (B) APPLICABLE DOLLAR THRESHOLD.—Section 3121 of

such Code is amended by adding at the end thereof the

following new subsection: ‘‘(x) APPLICABLE DOLLAR THRESHOLD.—For purposes of subsection (a)(7)(B), the term ‘applicable dollar threshold’ means

$1,000. In the case of calendar years after 1995, the Commissioner

of Social Security shall adjust such $1,000 amount at the same

time and in the same manner as under section 215(a)(1)(B)(ii)

of the Social Security Act with respect to the amounts referred

to in section 215(a)(1)(B)(i) of such Act, except that, for purposes

of this paragraph, 1993 shall be substituted for the calendar year

referred to in section 215(a)(1)(B)(ii)(II) of such Act. If any amount

as adjusted under the preceding sentence is not a multiple of

$100, such amount shall be rounded to the next lowest multiple

of $100.’’.

(C) EMPLOYMENT OF DOMESTIC EMPLOYEES UNDER AGE

18 EXCLUDED FROM COVERAGE.—Section 3121(b) of such

Code (defining employment) is amended—

(i) by striking ‘‘or’’ at the end of paragraph (19),

(ii) by striking the period at the end of paragraph

(20) and inserting ‘‘; or’’, and
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(iii) by adding at the end the following new paragraph:

‘‘(21) domestic service in a private home of the employer

which—

‘‘(A) is performed in any year by an individual under

the age of 18 during any portion of such year; and

‘‘(B) is not the principal occupation of such employee.’’.

(D) CONFORMING AMENDMENTS.—The second sentence

of section 3102(a) of such Code is amended—

(i) by striking ‘‘calendar quarter’’ each place it

appears and inserting ‘‘calendar year’’, and

(ii) by striking ‘‘$50’’ and inserting ‘‘the applicable

dollar threshold (as defined in section 3121(x)) for such

year’’.

(2) AMENDMENT OF SOCIAL SECURITY ACT.—

(A) GENERAL RULE.—Subparagraph (B) of section

209(a)(6) of the Social Security Act (42 U.S.C. 409(a)(6)(B))

is amended to read as follows:

‘‘(B) Cash remuneration paid by an employer in any calendar year to an employee for domestic service in a private

home of the employer (including domestic service described

in section 210(f)(5)), if the cash remuneration paid in such

year by the employer to the employee for such service is less

than the applicable dollar threshold (as defined in section

3121(x) of the Internal Revenue Code of 1986) for such year;’’.

(B) EMPLOYMENT OF DOMESTIC EMPLOYEES UNDER AGE

18 EXCLUDED FROM COVERAGE.—Section 210(a) of such Act

(42 U.S.C. 410(a)) is amended—

(i) by striking ‘‘or’’ at the end of paragraph (19),

(ii) by striking the period at the end of paragraph (20) and inserting ‘‘; or’’, and (iii) by adding at the end the following new paragraph: ‘‘(21) Domestic service in a private home of the employer

which—

‘‘(A) is performed in any year by an individual under

the age of 18 during any portion of such year; and ‘‘(B) is not the principal occupation of such employee.’’. (3) EFFECTIVE DATES.— (A) IN GENERAL.—Except as provided in subparagraph (B), the amendments made by this subsection shall apply

to remuneration paid after December 31, 1993.

(B) EXCLUDED EMPLOYMENT.—The amendments made

by paragraphs (1)(C) and (2)(B) shall apply to services

performed after December 31, 1994.

(4) NO LOSS OF SOCIAL SECURITY COVERAGE FOR 1994;

CONTINUATION OF W–2 FILING REQUIREMENT.—Notwithstanding

the amendments made by this subsection, if the wages (as

defined in section 3121(a) of the Internal Revenue Code of

1986) paid during 1994 to an employee for domestic service

in a private home of the employer are less than $1,000—

(A) the employer shall file any return or statement

required under section 6051 of such Code with respect

to such wages (determined without regard to such amendments), and

(B) the employee shall be entitled to credit under section 209 of the Social Security Act with respect to any
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such wages required to be included on any such return

or statement.

(b) COORDINATION OF COLLECTION OF DOMESTIC SERVICE

EMPLOYMENT TAXES WITH COLLECTION OF INCOME TAXES.—

(1) IN GENERAL.—Chapter 25 of the Internal Revenue Code

of 1986 (relating to general provisions relating to employment

taxes) is amended by adding at the end thereof the following

new section:

‘‘SEC. 3510. COORDINATION OF COLLECTION OF DOMESTIC SERVICE

EMPLOYMENT TAXES WITH COLLECTION OF INCOME

TAXES.

‘‘(a) GENERAL RULE.—Except as otherwise provided in this section—

‘‘(1) returns with respect to domestic service employment

taxes shall be made on a calendar year basis,

‘‘(2) any such return for any calendar year shall be filed

on or before the 15th day of the fourth month following the

close of the employer’s taxable year which begins in such calendar year, and

‘‘(3) no requirement to make deposits (or to pay installments under section 6157) shall apply with respect to such

taxes.

‘‘(b) DOMESTIC SERVICE EMPLOYMENT TAXES SUBJECT TO ESTIMATED TAX PROVISIONS.—

‘‘(1) IN GENERAL.—Solely for purposes of section 6654,

domestic service employment taxes imposed with respect to

any calendar year shall be treated as a tax imposed by chapter

2 for the taxable year of the employer which begins in such

calendar year.

‘‘(2) EMPLOYERS NOT OTHERWISE REQUIRED TO MAKE ESTIMATED PAYMENTS.—Paragraph (1) shall not apply to any

employer for any calendar year if—

‘‘(A) no credit for wage withholding is allowed under

section 31 to such employer for the taxable year of the

employer which begins in such calendar year, and

‘‘(B) no addition to tax would (but for this section)

be imposed under section 6654 for such taxable year by

reason of section 6654(e).

‘‘(3) ANNUALIZATION.—Under regulations prescribed by the

Secretary, appropriate adjustments shall be made in the

application of section 6654(d)(2) in respect of the amount

treated as tax under paragraph (1).

‘‘(4) TRANSITIONAL RULE.—In the case of any taxable year

beginning before January 1, 1998, no addition to tax shall

be made under section 6654 with respect to any underpayment

to the extent such underpayment was created or increased

by this section.

‘‘(c) DOMESTIC SERVICE EMPLOYMENT TAXES.—For purposes of

this section, the term ‘domestic service employment taxes’ means—

‘‘(1) any taxes imposed by chapter 21 or 23 on remuneration

paid for domestic service in a private home of the employer,

and

‘‘(2) any amount withheld from such remuneration pursuant to an agreement under section 3402(p).
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For purposes of this subsection, the term ‘domestic service in a

private home of the employer’ includes domestic service described

in section 3121(g)(5). ‘‘(d) EXCEPTION WHERE EMPLOYER LIABLE FOR OTHER EMPLOY- MENT TAXES.—To the extent provided in regulations prescribed by the Secretary, this section shall not apply to any employer

for any calendar year if such employer is liable for any tax under

this subtitle with respect to remuneration for services other than

domestic service in a private home of the employer. ‘‘(e) GENERAL REGULATORY AUTHORITY.—The Secretary shall prescribe such regulations as may be necessary or appropriate

to carry out the purposes of this section. Such regulations may

treat domestic service employment taxes as taxes imposed by chapter 1 for purposes of coordinating the assessment and collection

of such employment taxes with the assessment and collection of

domestic employers’ income taxes. ‘‘(f) AUTHORITY TO ENTER INTO AGREEMENTS TO COLLECT STATE

UNEMPLOYMENT TAXES.— ‘‘(1) IN GENERAL.—The Secretary is hereby authorized to enter into an agreement with any State to collect, as the

agent of such State, such State’s unemployment taxes imposed

on remuneration paid for domestic service in a private home

of the employer. Any taxes to be collected by the Secretary

pursuant to such an agreement shall be treated as domestic

service employment taxes for purposes of this section. ‘‘(2) TRANSFERS TO STATE ACCOUNT.—Any amount collected under an agreement referred to in paragraph (1) shall be transferred by the Secretary to the account of the State in the

Unemployment Trust Fund. ‘‘(3) SUBTITLE F MADE APPLICABLE.—For purposes of subtitle

F, any amount required to be collected under an agreement

under paragraph (1) shall be treated as a tax imposed by

chapter 23. ‘‘(4) STATE.—For purposes of this subsection, the term ‘State’ has the meaning given such term by section 3306(j)(1).’’. (2) CLERICAL AMENDMENT.—The table of sections for chapter 25 of such Code is amended by adding at the end thereof

the following:

‘‘Sec. 3510. Coordination of collection of domestic service employment taxes

with collection of income taxes.’’.

(3) EFFECTIVE DATE.—The amendments made by this sub- section shall apply to remuneration paid in calendar years

beginning after December 31, 1994. (4) EXPANDED INFORMATION TO EMPLOYERS.—The Secretary of the Treasury or the Secretary’s delegate shall prepare and

make available information on the Federal tax obligations of

employers with respect to employees performing domestic service in a private home of the employer. Such information shall

also include a statement that such employers may have obligations with respect to such employees under State laws relating

to unemployment insurance and workers compensation.

SEC. 3. ALLOCATIONS TO FEDERAL DISABILITY INSURANCE TRUST

FUND.

(a) ALLOCATION WITH RESPECT TO WAGES.—Section 201(b)(1)

of the Social Security Act (42 U.S.C. 401(b)(1)) is amended by

striking ‘‘(O) 1.20 per centum’’ and all that follows through ‘‘Decem-
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ber 31, 1999, and so reported,’’ and inserting ‘‘(O) 1.20 per centum

of the wages (as so defined) paid after December 31, 1989, and

before January 1, 1994, and so reported, (P) 1.88 per centum of

the wages (as so defined) paid after December 31, 1993, and before

January 1, 1997, and so reported, (Q) 1.70 per centum of the

wages (as so defined) paid after December 31, 1996, and before

January 1, 2000, and so reported, and (R) 1.80 per centum of

the wages (as so defined) paid after December 31, 1999, and so

reported,’’.

(b) ALLOCATION WITH RESPECT TO SELF-EMPLOYMENT

INCOME.—Section 201(b)(2) of such Act (42 U.S.C. 401(b)(2)) is

amended by striking ‘‘(O) 1.20 per centum’’ and all that follows

through ‘‘December 31, 1999,’’ and inserting ‘‘(O) 1.20 per centum

of the amount of self-employment income (as so defined) so reported

for any taxable year beginning after December 31, 1989, and before

January 1, 1994, (P) 1.88 per centum of the amount of self-employment income (as so defined) so reported for any taxable year beginning after December 31, 1993, and before January 1, 1997, (Q)

1.70 per centum of the amount of self-employment income (as

so defined) so reported for any taxable year beginning after December 31, 1996, and before January 1, 2000, and (R) 1.80 per centum

of the amount of self-employment income (as so defined) so reported

for any taxable year beginning after December 31, 1999,’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to wages paid after December 31, 1993,

and self-employment income for taxable years beginning after such

date.

(d) STUDY ON RISING COSTS OF DISABILITY BENEFITS.—

(1) IN GENERAL.—As soon as practicable after the date

of the enactment of this Act, the Commissioner of Social Security shall conduct a comprehensive study of the reasons for

rising costs payable from the Federal Disability Insurance Trust

Fund.

(2) MATTERS TO BE INCLUDED IN STUDY.—In conducting

the study under this subsection, the Commissioner of Social

Security shall—

(A) determine the relative importance of the following

factors in increasing the costs payable from the Trust Fund:

(i) increased numbers of applications for benefits;

(ii) higher rates of benefit allowances; and

(iii) decreased rates of benefit terminations; and

(B) identify, to the extent possible, underlying social,

economic, demographic, programmatic, and other trends

responsible for changes in disability benefit applications,

allowances, and terminations.

(3) REPORT.—Not later than October 1, 1995, the Commissioner of Social Security shall transmit a report to the Committee on Ways and Means of the House of Representatives and

the Committee on Finance of the Senate setting forth the

results of the study conducted under this subsection, together

with any recommendations for legislative changes which the

Commissioner determines appropriate.
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SEC. 4. NONPAYMENT OF BENEFITS TO INCARCERATED INDIVIDUALS

AND INDIVIDUALS CONFINED IN CRIMINAL CASES PURSUANT TO CONVICTION OR BY COURT ORDER BASED ON FINDINGS OF INSANITY.

(a) IN GENERAL.—Section 202(x) of the Social Security Act

(42 U.S.C. 402(x)) is amended—

(1) in the heading, by inserting ‘‘and Certain Other Inmates

of Publicly Funded Institutions’’ after ‘‘Prisoners’’;

(2) by striking ‘‘(x)(1) Notwithstanding’’ and all that follows

through the end of paragraph (1) and inserting the following:

‘‘(x)(1)(A) Notwithstanding any other provision of this title,

no monthly benefits shall be paid under this section or under

section 223 to any individual for any month during which such

individual—

‘‘(i) is confined in a jail, prison, or other penal institution

or correctional facility pursuant to his conviction of an offense

punishable by imprisonment for more than 1 year (regardless

of the actual sentence imposed), or

‘‘(ii) is confined by court order in an institution at public

expense in connection with—

‘‘(I) a verdict or finding that the individual is guilty

but insane, with respect to an offense punishable by imprisonment for more than 1 year,

‘‘(II) a verdict or finding that the individual is not

guilty of such an offense by reason of insanity,

‘‘(III) a finding that such individual is incompetent

to stand trial under an allegation of such an offense, or

‘‘(IV) a similar verdict or finding with respect to such

an offense based on similar factors (such as a mental

disease, a mental defect, or mental incompetence).

‘‘(B)(i) For purposes of clause (i) of subparagraph (A), an individual shall not be considered confined in an institution comprising

a jail, prison, or other penal institution or correctional facility

during any month throughout which such individual is residing

outside such institution at no expense (other than the cost of monitoring) to such institution or the penal system or to any agency

to which the penal system has transferred jurisdiction over the

individual.

‘‘(ii) For purposes of clause (ii) of subparagraph (A), an individual confined in an institution as described in such clause (ii) shall

be treated as remaining so confined until—

‘‘(I) he or she is released from the care and supervision

of such institution, and

‘‘(II) such institution ceases to meet the individual’s basic

living needs.’’;

and

(3) in paragraph (3), by striking ‘‘any individual’’ and all

that follows and inserting ‘‘any individual who is confined as

described in paragraph (1) if the confinement is under the

jurisdiction of such agency and the Commissioner of Social

Security requires such information to carry out the provisions

of this section.’’.

(b) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to benefits for months commencing after

90 days after the date of the enactment of this Act.
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SEC. 5. ADDITIONAL DEBT COLLECTION PRACTICES.

(a) IN GENERAL.—Section 204 of the Social Security Act (42 U.S.C. 404) is amended by adding at the end the following new

subsection:

‘‘(f)(1) With respect to any delinquent amount, the Commissioner of Social Security may use the collection practices described

in sections 3711(f), 3716, and 3718 of title 31, United States Code,

as in effect on October 1, 1994.

‘‘(2) For purposes of paragraph (1), the term ‘delinquent amount’

means an amount—

‘‘(A) in excess of the correct amount of payment under

this title;

‘‘(B) paid to a person after such person has attained 18

years of age; and ‘‘(C) determined by the Commissioner of Social Security,

under regulations, to be otherwise unrecoverable under this

section after such person ceases to be a beneficiary under

this title.’’.

(b) CONFORMING AMENDMENT.—Section 3701(d) of title 31,

United States Code, is amended by inserting ‘‘, except to the extent

provided under section 204(f) of such Act (42 U.S.C. 404(f)),’’ after

‘‘the Social Security Act (42 U.S.C. 301 et seq.)’’. (c) EFFECTIVE DATE.—The amendments made by this section

shall apply to collection activities begun on or after the date of

the enactment of this Act and before October 1, 1999.

SEC. 6. NURSING HOMES REQUIRED TO REPORT ADMISSIONS OF SSI

RECIPIENTS.

(a) IN GENERAL.—Section 1631(e)(1) of the Social Security Act (42 U.S.C. 1383(e)(1)) is amended by adding at the end the following

new subparagraph: ‘‘(C) For purposes of making determinations under section 1611(e), the requirements prescribed by the Commissioner of Social

Security pursuant to subparagraph (A) of this paragraph shall

require each administrator of a nursing home, extended care facility,

or intermediate care facility, within 2 weeks after the admission

of any eligible individual or eligible spouse receiving benefits under

this title, to transmit to the Commissioner a report of the

admission.’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

shall apply to admissions occurring on or after October 1, 1995.
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SEC. 7. RULE OF CONSTRUCTION.

Until March 31, 1995, any reference in this Act (other than section 3(d)) or any amendment made by this Act to the Commissioner of Social Security shall be deemed a reference to the Secretary of Health and Human Services.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.