I

103D CONGRESS

1ST SESSION H. R. 2334

To amend the Internal Revenue Code of 1986 to simplify the collection

of employment taxes on domestic services.

IN THE HOUSE OF REPRESENTATIVES

JUNE 8, 1993

Mr. HOUGHTON introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to simplify

the collection of employment taxes on domestic services.

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

3 SECTION 1. SIMPLIFICATION OF EMPLOYMENT TAXES ON

4 DOMESTIC SERVICES.

5 (a) COORDINATION OF COLLECTION OF DOMESTIC

6 SERVICE EMPLOYMENT WITH COLLECTION OF INCOME

7 TAXES.—

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

9 Revenue Code of 1986 (relating to general provi-
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1 sions relating to employment taxes) is amended by

2 adding at the end thereof the following new section:

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

4 SERVICE EMPLOYMENT TAXES WITH COLLEC5 TION OF INCOME TAXES.

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

7 in this section—

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

9 employment taxes shall be made on a calendar year

10 basis,

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

12 shall be filed on or before the 15th day of the fourth

13 month following the close of the employer’s taxable

14 year which begins in such calendar year, and

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

16 pay installments under section 6157) shall apply

17 with respect to such taxes.

18 ‘‘(b) DOMESTIC SERVICE EMPLOYMENT TAXES SUB19 JECT TO ESTIMATED TAX PROVISIONS.—

20 ‘‘(1) IN GENERAL.—Solely for purposes of sec21 tion 6654, domestic service employment taxes im22 posed with respect to any calendar year shall be

23 treated as a tax imposed by chapter 2 for the tax24 able year of the employer which begins in such cal25 endar year.
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1 ‘‘(2) ANNUALIZATION.—Under regulations pre2 scribed by the Secretary, appropriate adjustments

3 shall be made in the application of section

4 6654(d)(2) in respect of the amount treated as tax

5 under paragraph (1).

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

7 applying section 6654 to a taxable year beginning in

8 1993, the amount referred to in clause (ii) of section

9 6654(d)(1)(B) shall be increased by 90 percent of

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

11 such taxable year.

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

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

14 employment taxes’ means—

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

16 remuneration paid for domestic service in a private

17 home of the employer, and

18 ‘‘(2) any amount withheld from such remunera19 tion pursuant to an agreement under section

20 3402(p).

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

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

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

24 ‘‘(d) EXCEPTION WHERE EMPLOYER IS LIABLE FOR

25 OTHER EMPLOYMENT TAXES.—To the extent provided in
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1 regulations prescribed by the Secretary, this section shall

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

3 employer is liable for any tax under this subtitle with re4 spect to remuneration for services other than domestic

5 service in a private home of the employer.

6 ‘‘(e) GENERAL REGULATORY AUTHORITY.—The Sec7 retary shall prescribe such regulations as may be nec8 essary or appropriate to carry out the purposes of this

9 section. Such regulations may treat domestic service em10 ployment taxes as taxes imposed by chapter 1 for purposes

11 of coordinating the assessment and collection of such em12 ployment taxes with the assessment and collection of do13 mestic employers’ income taxes.

14 ‘‘(f) AUTHORITY TO ENTER INTO AGREEMENTS TO

15 COLLECT STATE UNEMPLOYMENT TAXES.—

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

17 authorized to enter into an agreement with any

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

19 State’s unemployment taxes imposed on remunera20 tion paid for domestic service in a private home of

21 the employer. Any taxes to be collected by the Sec22 retary pursuant to such an agreement shall be treat23 ed as domestic service employment taxes for pur24 poses of this section.
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1 ‘‘(2) TRANSFERS TO STATE ACCOUNT.—Any

2 amount collected under an agreement referred to in

3 paragraph (1) shall be transferred by the Secretary

4 to the account of the State in the Unemployment

5 Trust Fund.

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

7 purposes of subtitle F, any amount required to be

8 collected under an agreement under paragraph (1)

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

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

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

12 section 3306(j)(1).’’

13 (2) CLERICAL AMENDMENT.—The table of sec14 tions for chapter 25 of such Code is amended by

15 adding at the end thereof the following:

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

16 (3) EFFECTIVE DATE.—The amendments made

17 by this subsection shall apply to remuneration paid

18 in calendar years beginning after December 31,

19 1993.

20 (4) EXPANDED INFORMATION TO EMPLOY21 ERS.—The Secretary of the Treasury or his delegate

22 shall prepare and make available information on the

23 Federal tax obligations of employers with respect to

24 employees performing domestic service in a private
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1 home of the employer. Such information shall also

2 include a statement that such employers may have

3 obligations with respect to such employees under

4 State laws relating to unemployment insurance and

5 workers compensation.

6 (b) THRESHOLD REQUIREMENT FOR SOCIAL SECU7 RITY TAXES.—

8 (1) AMENDMENTS OF INTERNAL REVENUE

9 CODE.—

10 (A) Subparagraph (B) of section

11 3121(a)(7) of the Internal Revenue Code of

12 1986 (defining wages) is amended to read as

13 follows:

14 ‘‘(B) cash remuneration paid by an em15 ployer in any calendar year to an employee for

16 domestic service in a private home of the em17 ployer, if the cash remuneration paid in such

18 year by the employer to the employee for such

19 service is less than $800. As used in this sub20 paragraph, the term ‘domestic service in a pri21 vate home of the employer’ does not include

22 service described in subsection (g)(5);’’

23 (B) The second sentence of section

24 3102(a) of such 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 ‘‘$800’’.

6 (2) AMENDMENT OF SOCIAL SECURITY ACT.—

7 Subparagraph (B) of section 209(a)(6) of the Social

8 Security Act is amended to read as follows:

9 ‘‘(B) Cash remuneration paid by an em10 ployer in any calendar year to an employee for

11 domestic service in a private home of the em12 ployer, if the cash remuneration paid in such

13 year by the employer to the employee for such

14 service is less than $800. As used in this sub15 paragraph, the term ‘domestic service in a pri16 vate home of the employer’ does not include

17 service described in section 210(f)(5).’’

18 (3) EFFECTIVE DATE.—The amendments made

19 by this subsection shall apply to remuneration paid

20 in calendar years beginning after December 31,

21 1993.

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