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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3088 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 3088

 To amend the Internal Revenue Code of 1986 and title II of the Social 
    Security Act to simplify employment taxes on domestic services.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 15, 1993

 Mrs. Kennelly (for herself, Mr. Houghton, Mrs. Meek, Mr. Matsui, Mr. 
 Camp, Mr. Cardin, Mr. Coyne, Mr. Ford of Tennessee, Mr. Gibbons, Mr. 
Grandy, Mr. Hancock, Mr. Herger, Mr. Jefferson, Mr. Kopetski, Mr. Lewis 
   of Georgia, Mr. McNulty, Mr. Neal of Massachusetts, Mr. Payne of 
    Virginia, Mr. Rangel, Mr. Reynolds, Mr. Santorum, Mr. Shaw, Mr. 
  Sundquist, Mr. Thomas of California, and Mr. Fazio) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL

 
 To amend the Internal Revenue Code of 1986 and title II of the Social 
    Security Act to simplify employment taxes on domestic services.

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

SECTION 1. COORDINATION OF COLLECTION OF DOMESTIC SERVICE EMPLOYMENT 
              TAXES WITH COLLECTION OF INCOME TAXES.

    (a) 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 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) 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).
            ``(3) Transitional rule.--For purposes of applying section 
        6654 to a taxable year beginning in 1993, the amount referred 
        to in clause (ii) of section 6654(d)(1)(B) shall be increased 
        by 90 percent of the amount treated as tax under paragraph (1) 
        for such taxable year.
    ``(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).
For purposes of this subsection, the term `domestic service in a 
private home of the employer' does not include service described in 
section 3121(g)(5).
    ``(d) Exception Where Employer Liable for Other Employment 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).''
    (b) 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.''
    (c) Effective Date.--The amendments made by this section shall 
apply to remuneration paid in calendar years beginning after December 
31, 1993.
    (d) Expanded Information to Employers.--The Secretary of the 
Treasury or his 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. 2. THRESHOLD REQUIREMENT FOR SOCIAL SECURITY TAXES.

    (a) Amendments of Internal Revenue Code.--
            (1) Treatment as wages.--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 (other than 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 (y)) for 
        such year;''.
            (2) Applicable dollar threshold.--Section 3121 of such Code 
        is amended by adding at the end the following new subsection:
    ``(y) Applicable Dollar Threshold for Domestic Employees.--For 
purposes of subsection (a)(7)(B), the term `applicable dollar 
threshold' means $800. In the case of calendar years after 1994, the 
Secretary of Health and Human Services shall adjust such $800 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 
subparagraph, 1992 shall be substituted for the calendar year referred 
to in section 215(a)(1)(B)(ii)(II) of such Act. If the amount 
determined under the preceding sentence is not a multiple of $50, such 
amount shall be rounded to the nearest multiple of $50.''
            (3) Employment of domestic employees 16 and under excluded 
        from coverage.--Section 3121(b) of such Code (defining 
        employment) is amended--
                    (A) by striking ``or'' at the end of paragraph 
                (19),
                    (B) by striking the period at the end of paragraph 
                (20) and inserting ``; or'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(21) domestic service in a private home of the employer 
        performed in any year by an individual 16 and under during any 
        portion of such year.''
            (4) Conforming amendments.--The second sentence of section 
        3102(a) of such Code is amended--
                    (A) by striking ``calendar quarter'' each place it 
                appears and inserting ``calendar year'', and
                    (B) by striking ``$50'' and inserting ``the 
                applicable dollar threshold (as defined in section 
                3121(y)) for such year''.
    (b) Amendment of Social Security Act.--
            (1) In general.--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 (other than 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(y) of 
        the Internal Revenue Code of 1986) for such year;''.
            (2) Employment of domestic employees 16 and under excluded 
        from coverage.--Section 210(a) of such Act (42 U.S.C. 410(a)) 
        is amended--
                    (A) by striking ``or'' at the end of paragraph 
                (19),
                    (B) by striking the period at the end of paragraph 
                (20) and inserting ``; or'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(21) domestic service in a private home of the employer 
        performed in any year by an individual 16 and under during any 
        portion of such year.''
    (c) Effective Date.--The amendments made by this section shall 
apply to remuneration paid in calendar years beginning after December 
31, 1993.

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