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103D CONGRESS

1ST SESSION H. R. 1240

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

Code of 1986 to increase from $50 per quarter to $2,000 per year

the threshold level at which cash remuneration payable to a domestic

employee in any year becomes subject to social security employment

taxes, to provide for annual adjustments in such threshold amount,

and to annualize the payment of domestic service employment taxes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 4, 1993

Mr. SHAW 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 from $50 per quarter

to $2,000 per year the threshold level at which cash

remuneration payable to a domestic employee in any

year becomes subject to social security employment taxes,

to provide for annual adjustments in such threshold

amount, and to annualize the payment of domestic service employment taxes.

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

2 This Act may be cited as the ‘‘Social Security Domes3 tic Employment Tax Act of 1993’’.

4 SEC. 2. INCREASE IN THRESHOLD LEVEL AT WHICH CASH

5 REMUNERATION FOR DOMESTIC SERVICES

6 BECOMES SUBJECT TO SOCIAL SECURITY EM7 PLOYMENT TAXES.

8 (a) AMOUNTS EXCLUDED FROM WAGES UNDER THE

9 SOCIAL SECURITY ACT.—Subparagraph (B) of section

10 209(a)(6) of the Social Security Act (42 U.S.C.

11 409(a)(6)(B)) is amended to read as follows:

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

13 in any calendar year to an employee for domestic

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

15 remuneration paid in such year by the employer to

16 the employee for such service is less than the thresh17 old amount determined under clause (ii) for such

18 year.

19 ‘‘(ii) The threshold amount for 1993 shall be

20 $2,000. The Secretary shall, on or after November

21 1 of 1993 and of every year thereafter, determine

22 and publish in the Federal Register the threshold

23 amount for the succeeding calendar year. Such

24 threshold amount shall be the larger of—
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1 ‘‘(I) the amount in effect for the calendar

2 year in which the determination under this

3 clause is made, or

4 ‘‘(II) the product of $2,000 and the ratio

5 of the deemed average total wages (as defined

6 in section 209(k)(1)) for the calendar year be7 fore the year in which the determination under

8 this clause is made to the deemed average total

9 wages (as so defined) for 1991, with such prod10 uct, if not a multiple of $10, being rounded to

11 the next higher multiple of $10 where such

12 amount is a multiple of $5 but not of $10 and

13 to the nearest multiple of $10 in any other

14 case.

15 ‘‘(iii) As used in this subparagraph, the term

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

17 does not include service described in section

18 210(f)(5).’’.

19 (b) AMOUNTS EXCLUDED FROM WAGES UNDER THE

20 INTERNAL REVENUE CODE OF 1986.—

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

22 3121(a)(7) of the Internal Revenue Code of 1986

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

24 ‘‘(B) cash remuneration paid by an em25 ployer in any calendar year to an employee for
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1 domestic service in a private home of the em2 ployer, if the cash remuneration paid in such

3 year by the employer to the employee for such

4 service is less than the threshold amount deter5 mined under section 209(a)(6)(B)(ii) of the So6 cial Security Act for such year. As used in this

7 subparagraph, the term ‘domestic service in a

8 private home of the employer’ does not include

9 service described in subsection (g)(5);’’.

10 (2) CONFORMING AMENDMENT.—The second

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

12 deduction of tax from wages) is amended—

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

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

15 and

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

17 threshold amount determined under section

18 209(a)(6)(B)(ii) of the Social Security Act for

19 such year’’.

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

21 this section shall apply to remuneration paid in calendar

22 years after 1992.
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1 SEC. 3. COORDINATION OF COLLECTION OF DOMESTIC

2 SERVICE EMPLOYMENT TAXES WITH COLLEC3 TION OF INCOME TAXES.

4 (a) IN GENERAL.—Chapter 25 of the Internal Reve5 nue Code of 1986 (relating to general provisions relating

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

7 the following new section:

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

9 SERVICE EMPLOYMENT TAXES WITH COLLEC10 TION OF INCOME TAXES.

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

12 in this section—

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

14 employment taxes shall be made on a calendar year

15 basis,

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

17 shall be filed on or before the due date (including ex18 tensions) of the income tax return for the employer’s

19 taxable year which begins in such calendar year, and

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

21 pay installments under section 6157) shall apply

22 with respect to such taxes.

23 ‘‘(b) DOMESTIC SERVICE EMPLOYMENT TAXES SUB24 JECT TO ESTIMATED TAX PROVISIONS.—

25 ‘‘(1) IN GENERAL.—Solely for purposes of sec26 tion 6654, domestic service employment taxes im-
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1 posed with respect to any calendar year shall be

2 treated as a tax imposed by chapter 2 for the tax3 able year of the employer which begins in such

4 calendar year.

5 ‘‘(2) ANNUALIZATION.—Under regulations pre6 scribed by the Secretary, appropriate adjustments

7 shall be made in the application of section

8 6654(d)(2) in respect of the amount treated as tax

9 under paragraph (1).

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

11 applying section 6654 to a taxable year beginning in

12 1993, the amount referred to in clause (ii) of section

13 6654(d)(1)(B) shall be increased by 90 percent of

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

15 such taxable year.

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

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

18 employment taxes’ means—

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

20 remuneration paid for domestic service in a private

21 home of the employer, and

22 ‘‘(2) any amount withheld from such remunera23 tion pursuant to an agreement under section

24 3402(p).
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1 For purposes of this subsection, the term ‘domestic service

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

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

4 ‘‘(d) EXCEPTION WHERE EMPLOYER LIABLE FOR

5 OTHER EMPLOYMENT TAXES.—To the extent provided in

6 regulations prescribed by the Secretary, this section shall

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

8 employer is liable for any tax under this subtitle with re9 spect to remuneration paid in such year for services other

10 than domestic service in a private home of the employer.

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

12 COLLECT STATE UNEMPLOYMENT TAXES.—

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

14 authorized to enter into an agreement with any

15 State to collect, as the agent of such State, such

16 State’s unemployment taxes imposed on remunera17 tion paid for domestic service in a private home of

18 the employer. Any taxes to be collected by the

19 Secretary pursuant to such an agreement shall be

20 treated as domestic service employment taxes for

21 purposes of this section.

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

23 amount collected under an agreement referred to in

24 paragraph (1) shall be transferred by the Secretary
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1 to the account of the State in the Unemployment

2 Trust Fund.

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

4 purposes of subtitle F, any amount required to be

5 collected under an agreement under paragraph (1)

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

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

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

9 section 3306(j)(1).’’

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

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

12 the following:

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

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

14 this section shall apply to remuneration paid in calendar

15 years after 1992.

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