I

103D CONGRESS

1ST SESSION H. R. 899

To amend title II of the Social Security Act and the Internal Revenue

Code of 1986 to increase the minimum amount of cash remuneration

payable to a domestic employee in any year which is subject to social

security employment taxes, to provide for annual adjustments in such

minimum amount, and to simplify the payment of such employment

taxes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 16, 1993

Mr. KLUG introduced the following bill; which was referred to the Committee

on Ways and Means

A BILL

To amend title II of the Social Security Act and the Internal

Revenue Code of 1986 to increase the minimum amount

of cash remuneration payable to a domestic employee

in any year which is subject to social security employment taxes, to provide for annual adjustments in such

minimum amount, and to simplify the payment of such

employment taxes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Social Security Domes5 tic Employment Tax Simplification Act of 1993’’.
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1 SEC. 2. INCREASE IN MINIMUM AMOUNT OF CASH REMU2 NERATION FOR DOMESTIC SERVICES SUB3 JECT TO SOCIAL SECURITY EMPLOYMENT

4 TAXES.

5 (a) DETERMINATION OF WAGES UNDER THE SOCIAL

6 SECURITY ACT.—Subparagraph (B) of section 209(a)(6)

7 of the Social Security Act is amended to read as follows:

8 ‘‘(B)(i) Cash remuneration paid by an employer

9 in any calendar year to an employee for domestic

10 service in a private home of the employer, if the cash

11 remuneration paid in such year by the employer to

12 the employee for such service is less than the mini13 mum assessed wages determined under this subpara14 graph for such year.

15 ‘‘(ii) The minimum assessed wages for 1993

16 shall be the product of $200 and the ratio of the av17 erage of the total wages (as defined in regulations

18 of the Secretary and computed without regard to the

19 limitations specified in section 209(a)(1)) for 1992

20 to the average of the total wages (as so defined) for

21 1950, with such product, if not a multiple of $10,

22 being rounded to the next higher multiple of $10

23 where such amount is a multiple of $5 but not of

24 $10 and to the nearest multiple of $10 in any other

25 case.
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1 ‘‘(iii) The Secretary shall, on or after November

2 1 of 1993 and of every year thereafter, determine

3 and publish in the Federal Register the minimum

4 assessed wages for the succeeding calendar year.

5 The amount of such minimum assessed wages shall

6 be the larger of—

7 ‘‘(I) the amount in effect for the calendar

8 year in which the determination under this

9 clause is made, or

10 ‘‘(II) the product of the minimum assessed

11 wages for 1993 and the ratio of the deemed av12 erage total wages (as defined in section

13 209(k)(1)) for the calendar year before the year

14 in which the determination under this clause is

15 made to the deemed average total wages (as so

16 defined) for 1991,

17 with such product, if not a multiple of $10, being

18 rounded to the next higher multiple of $10 where

19 such amount is a multiple of $5 but not of $10 and

20 to the nearest multiple of $10 in any other case.

21 ‘‘(iv) As used in this subparagraph, the term

22 ‘domestic service in a private home of the employer’

23 does not include service described in section

24 210(f)(5).’’.
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1 (b) DETERMINATION OF WAGES UNDER THE INTER2 NAL REVENUE CODE OF 1986.—

3 (1) IN GENERAL.—Subparagraph (B) of section

4 3121(a)(7) of the Internal Revenue Code of 1986

5 (defining wages) is amended to read as follows:

6 ‘‘(B) cash remuneration paid by an em7 ployer in any calendar year to an employee for

8 domestic service in a private home of the em9 ployer, if the cash remuneration paid in such

10 year by the employer to the employee for such

11 service is less than the minimum assessed

12 wages determined under section 209(a)(6)(B)

13 of the Social Security Act for such year. As

14 used in this subparagraph, the term ‘domestic

15 service in a private home of the employer’ does

16 not include service described in subsection

17 (g)(5);’’.

18 (2) CONFORMING AMENDMENT.—The second

19 sentence of section 3102(a) of such Code (relating to

20 deduction of tax from wages) is amended—

21 (A) by striking ‘‘calendar quarter’’ each

22 place it appears and inserting ‘‘calendar year’’,

23 and

24 (B) by striking ‘‘$50’’ and inserting ‘‘the

25 minimum assessed wages determined under sec-
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1 tion 209(a)(6)(B) of the Social Security Act for

2 such year’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to remuneration paid in calendar

5 years after 1992. As soon as practicable after the date

6 of the enactment of this Act, the Secretary of Health and

7 Human Services shall publish in the Federal Register the

8 minimum assessed wages for 1993, determined under

9 section 209(a)(6)(B)(ii) of the Social Security Act (as

10 amended by this Act).

11 SEC. 3. COORDINATION OF COLLECTION OF DOMESTIC

12 SERVICE EMPLOYMENT WITH COLLECTION

13 OF INCOME TAXES.

14 (a) IN GENERAL.—Chapter 25 of the Internal Reve15 nue Code of 1986 (relating to general provisions relating

16 to employment taxes) is amended by adding at the end

17 the following new section:

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

19 SERVICE EMPLOYMENT TAXES WITH COLLEC20 TION OF INCOME TAXES.

21 ‘‘(a) GENERAL RULE.—Except as otherwise provided

22 in this section—

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

24 employment taxes shall be made on a calendar year

25 basis,
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1 ‘‘(2) any such return for any calendar year

2 shall be filed on or before the due date (including ex3 tensions) of the income tax return for the employer’s

4 taxable year which begins in such calendar year, and

5 ‘‘(3) no requirement to make deposits (or to

6 pay installments under section 6157) shall apply

7 with respect to such taxes.

8 ‘‘(b) DOMESTIC SERVICE EMPLOYMENT TAXES SUB9 JECT TO ESTIMATED TAX PROVISIONS.—

10 ‘‘(1) IN GENERAL.—Solely for purposes of sec11 tion 6654, domestic service employment taxes im12 posed with respect to any calendar year shall be

13 treated as a tax imposed by chapter 2 for the tax14 able year of the employer which begins in such cal15 endar year.

16 ‘‘(2) ANNUALIZATION.—Under regulations pre17 scribed by the Secretary, appropriate adjustments

18 shall be made in the application of section

19 6654(d)(2) in respect of the amount treated as tax

20 under paragraph (1).

21 ‘‘(3) TRANSITIONAL RULE.—For purposes of

22 applying section 6654 to a taxable year beginning in

23 1993, the amount referred to in clause (ii) of section

24 6654(d)(1)(B) shall be increased by 90 percent of
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1 the amount treated as tax under paragraph (1) for

2 such taxable year.

3 ‘‘(c) DOMESTIC SERVICE EMPLOYMENT TAXES.—

4 For purposes of this section, the term ‘domestic service

5 employment taxes’ means—

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

7 remuneration paid for domestic service in a private

8 home of the employer, and

9 ‘‘(2) any amount withheld from such remunera10 tion pursuant to an agreement under section

11 3402(p).

12 For purposes of this subsection, the term ‘domestic service

13 in a private home of the employer’ does not include service

14 described in section 3121(g)(5).

15 ‘‘(d) EXCEPTION WHERE EMPLOYER LIABLE FOR

16 OTHER EMPLOYMENT TAXES.—To the extent provided in

17 regulations prescribed by the Secretary, this section shall

18 not apply to any employer for any calendar year if such

19 employer is liable for any tax under this subtitle with re20 spect to remuneration for services other than domestic

21 service in a private home of the employer.

22 ‘‘(e) AUTHORITY TO ENTER INTO AGREEMENTS TO

23 COLLECT STATE UNEMPLOYMENT TAXES.—

24 ‘‘(1) IN GENERAL.—The Secretary is hereby

25 authorized to enter into an agreement with any
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1 State to collect, as the agent of such State, such

2 State’s unemployment taxes imposed on remunera3 tion paid for domestic service in a private home of

4 the employer. Any taxes to be collected by the Sec5 retary pursuant to such an agreement shall be treat6 ed as domestic service employment taxes for pur7 poses of this section.

8 ‘‘(2) TRANSFERS TO STATE ACCOUNT.—Any

9 amount collected under an agreement referred to in

10 paragraph (1) shall be transferred by the Secretary

11 to the account of the State in the Unemployment

12 Trust Fund.

13 ‘‘(3) SUBTITLE F MADE APPLICABLE.—For

14 purposes of subtitle F, any amount required to be

15 collected under an agreement under paragraph (1)

16 shall be treated as a tax imposed by chapter 23.

17 ‘‘(4) STATE.—For purposes of this subsection,

18 the term ‘State’ has the meaning given such term by

19 section 3306(j)(1).’’

20 (b) CLERICAL AMENDMENT.—The table of sections

21 for chapter 25 is amended by adding at the end thereof

22 the following:

‘‘Sec. 3510. Coordination of collection of domestic service employment taxes with collection of income taxes.’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to remuneration paid in calendar

3 years after 1992.

4 SEC. 4. STUDY REGARDING MINIMUM ASSESSED WAGES

5 FOR DOMESTIC SERVICE.

6 (a) IN GENERAL.—The Secretary of Health and

7 Human Services and the Secretary of the Treasury shall

8 conduct a joint study of the effects of the amendments

9 made by this Act. In the course of such study, the Sec10 retaries shall—

11 (1) analyze the effect of the amounts of mini12 mum assessed wages established pursuant to such

13 amendments on the integrity of the Federal Old-Age

14 and Survivors Insurance Trust Fund, the Federal

15 Disability Insurance Trust Fund, and the Federal

16 Hospital Insurance Trust Fund,

17 (2) evaluate the annual savings to the Govern18 ment caused by the annualization of the employment

19 taxes provided in such amendments, and

20 (3) such other related matters as they consider

21 appropriate.

22 (b) REPORT.—Not later than January 1, 1996, the

23 Secretaries shall transmit a report to the Committee on

24 Ways and Means of the House of Representatives and the

25 Committee on Finance of the Senate setting forth the re-
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1 sults of their study conducted pursuant to subsection (a).

2 Such study shall include such recommendations for legisla3 tive changes as such Secretaries may consider appropriate.

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