II

103D CONGRESS

1ST SESSION S. 1231

To provide for simplified collection of employment taxes on domestic services,

and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 14 (legislative day, JUNE 30), 1993

Mr. MOYNIHAN (for himself, Mr. DOLE, Mr. BOREN, Mr. WALLOP, Mr.

GRASSLEY, and Mr. CHAFEE) introduced the following bill; which was

read twice and referred to the Committee on Finance

A BILL

To provide for simplified collection of employment taxes on

domestic services, and for other purposes.

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 Reform Act of 1993’’.

6 SEC. 2. SIMPLIFICATION OF EMPLOYMENT TAXES ON DO7 MESTIC SERVICES.

8 (a) THRESHOLD REQUIREMENT FOR SOCIAL SECU9 RITY TAXES.—
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1 (1) AMENDMENTS OF INTERNAL REVENUE

2 CODE.—

3 (A) GENERAL RULE.—Subparagraph (B)

4 of section 3121(a)(7) of the Internal Revenue

5 Code of 1986 (defining wages) is amended to

6 read as follows:

7 ‘‘(B) cash remuneration paid by an em8 ployer in any calendar year to an employee for

9 domestic service in a private home of the em10 ployer (other than service described in sub11 section (g)(5)), if the cash remuneration paid in

12 such year by the employer to the employee for

13 such service is less than the applicable dollar

14 threshold (as defined in subsection (y)) for such

15 year;’’.

16 (B) APPLICABLE DOLLAR THRESHOLD.—

17 Section 3121 of such Code is amended by add18 ing at the end thereof the following new sub19 section:

20 ‘‘(y) APPLICABLE DOLLAR THRESHOLD.—For pur21 poses of subsection (a)(7)(B), the term ‘applicable dollar

22 threshold’ means the amount required for a quarter of cov23 erage as determined under section 213(d)(2) of the Social

24 Security Act for calendar year 1994. In the case of cal25 endar years after 1994, the Secretary of Health and
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1 Human Services shall adjust such amount at the same

2 time and in the same manner as the amount under section

3 213(d)(2) of the Social Security Act, except that such ad4 justment shall not take effect in any year in which the

5 otherwise adjusted amount does not exceed the amount

6 in effect under this subsection for the preceding calendar

7 year by at least $50.’’

8 (C) EMPLOYMENT OF DOMESTIC EMPLOY9 EES UNDER AGE 18 EXCLUDED FROM COV10 ERAGE.—Section 3121(b) of such Code (defin11 ing employment) is amended—

12 (i) by striking ‘‘or’’ at the end of

13 paragraph (19),

14 (ii) by striking the period at the end

15 of paragraph (20) and inserting ‘‘; or’’,

16 and

17 (iii) by adding at the end the follow18 ing new paragraph:

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

20 employer performed in any year by an individual

21 under the age of 18 during any portion of such

22 year.’’

23 (D) CONFORMING AMENDMENTS.—The

24 second sentence of section 3102(a) of such

25 Code is amended—
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1 (i) by striking ‘‘calendar quarter’’

2 each place it appears and inserting ‘‘cal3 endar year’’, and

4 (ii) by striking ‘‘$50’’ and inserting

5 ‘‘the applicable dollar threshold (as defined

6 in section 3121(y)) for such year’’.

7 (2) AMENDMENT OF SOCIAL SECURITY ACT.—

8 (A) GENERAL RULE.—Subparagraph (B)

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

10 (42 U.S.C. 409(a)(6)(B)) is amended to read as

11 follows:

12 ‘‘(B) Cash remuneration paid by an employer in

13 any calendar year to an employee for domestic serv14 ice in a private home of the employer (other than

15 service described in section 210(f)((5)), if the cash

16 remuneration paid in such year by the employer to

17 the employee for such service is less than the appli18 cable dollar threshold (as defined in section 3121(y)

19 of the Internal Revenue Code of 1986) for such

20 year;’’.

21 (B) EMPLOYMENT OF DOMESTIC EMPLOY22 EES UNDER AGE 18 EXCLUDED FROM COV23 ERAGE.—Section 210(a) of such Act (42 U.S.C.

24 410(a)) is amended—
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1 (i) by striking ‘‘or’’ at the end of

2 paragraph (19),

3 (ii) by striking the period at the end

4 of paragraph (20) and inserting ‘‘; or’’,

5 and

6 (iii) by adding at the end the follow7 ing new paragraph:

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

9 employer performed in any year by an individual

10 under the age of 18 during any portion of such

11 year.’’

12 (3) EFFECTIVE DATE.—The amendments made

13 by this subsection shall apply to remuneration paid

14 in calendar years beginning after December 31,

15 1993.

16 (b) COORDINATION OF COLLECTION OF DOMESTIC

17 SERVICE EMPLOYMENT WITH COLLECTION OF INCOME

18 TAXES.—

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

20 Revenue Code of 1986 (relating to general provi21 sions relating to employment taxes) is amended by

22 adding at the end thereof the following new section:
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1 ‘‘SEC. 3510. COORDINATION OF COLLECTION OF DOMESTIC

2 SERVICE EMPLOYMENT TAXES WITH COLLEC3 TION OF INCOME TAXES.

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

5 in this section—

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

7 employment taxes shall be made on a calendar year

8 basis,

9 ‘‘(2) any such return for any calendar year

10 shall be filed on or before the 15th day of the 4th

11 month following the close of the employer’s taxable

12 year which begins in such calendar year, and

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

14 pay installments under section 6157) shall apply

15 with respect to such taxes.

16 ‘‘(b) DOMESTIC SERVICE EMPLOYMENT TAXES SUB17 JECT TO ESTIMATED TAX PROVISIONS.—

18 ‘‘(1) IN GENERAL.—Solely for purposes of sec19 tion 6654, domestic service employment taxes im20 posed with respect to any calendar year shall be

21 treated as a tax imposed by chapter 2 for the tax22 able year of the employer which begins in such cal23 endar year.

24 ‘‘(2) SPECIAL RULE WHERE TAXES ARE PAID

25 ON OR BEFORE APRIL 15.—If, on or before the date

26 described in subsection (a)(2) or, if earlier, the date
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1 the return is filed, the employer pays in full the do2 mestic service employment taxes computed on such

3 return as payable for any calendar year, then no ad4 dition to tax shall be imposed under section 6654(a)

5 with respect to any underpayment of any required

6 installment of such taxes for the taxable year begin7 ning in such calendar year.

8 ‘‘(3) ANNUALIZATION.—Under regulations pre9 scribed by the Secretary, appropriate adjustments

10 shall be made in the application of section

11 6654(d)(2) in respect of the amount treated as tax

12 under paragraph (1).

13 ‘‘(4) TRANSITIONAL RULE.—For purposes of

14 applying section 6654 to a taxable year beginning in

15 1994, the amount referred to in clause (ii) of section

16 6654(d)(1)(B) shall be increased by 90 percent of

17 the amount treated as tax under paragraph (1) for

18 such preceding taxable year.

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

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

21 employment taxes’ means—

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

23 remuneration paid for domestic service in a private

24 home of the employer, and
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1 ‘‘(2) any amount withheld from such remunera2 tion pursuant to an agreement under section

3 3402(p).

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

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

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

7 ‘‘(d) EXCEPTION WHERE EMPLOYER LIABLE FOR

8 OTHER EMPLOYMENT TAXES.—To the extent provided in

9 regulations prescribed by the Secretary, this section shall

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

11 employer is liable for any tax under this subtitle with re12 spect to remuneration for services other than domestic

13 service in a private home of the employer.

14 ‘‘(e) GENERAL REGULATORY AUTHORITY.—The Sec15 retary shall prescribe such regulations as may be nec16 essary or appropriate to carry out the purposes of this

17 section. Such regulations may treat domestic service em18 ployment taxes as taxes imposed by chapter 1 for purposes

19 of coordinating the assessment and collection of such em20 ployment taxes with the assessment and collection of do21 mestic employers’ income taxes.

22 ‘‘(f) 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 (2) CLERICAL AMENDMENT.—The table of sec21 tions for chapter 25 of such Code is amended by

22 adding at the end thereof the following:

‘‘Sec. 3510. Coordination of collection of domestic service employment taxes with collection of income taxes.’’

23 (3) EFFECTIVE DATE.—The amendments made

24 by this subsection shall apply to remuneration paid
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1 in calendar years beginning after December 31,

2 1993.

3 (4) EXPANDED INFORMATION TO EMPLOY4 ERS.—The Secretary of the Treasury or his delegate

5 shall prepare and make available information on the

6 Federal tax obligations of employers with respect to

7 employees performing domestic service in a private

8 home of the employer. Such information shall also

9 include a statement that such employers may have

10 obligations with respect to such employees under

11 State laws relating to unemployment insurance and

12 workers compensation.

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