I
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 Massa-
chusetts, 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 Com-
mittee 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 Representa-
tives of the United States of America in Congress assembled,
SECTION 1. COORDINATION OF COLLECTION OF DOMESTIC
SERVICE EMPLOYMENT TAXES WITH COLLEC-
TION OF INCOME TAXES.
(a) IN GENERAL.—Chapter 25 of the Internal Reve-
nue 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 COLLEC-
TION 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 SUB-
JECT TO ESTIMATED TAX PROVISIONS.—
‘‘(1) IN GENERAL.—Solely for purposes of sec-
tion 6654, domestic service employment taxes im-
posed with respect to any calendar year shall be
treated as a tax imposed by chapter 2 for the tax-
able year of the employer which begins in such cal-
endar year.
‘‘(2) ANNUALIZATION.—Under regulations pre-
scribed 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 remunera-
tion 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
‘‘(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 employ-
ment 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 obliga-
tions 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 em-
ployers may have obligations with respect to such employ-
ees 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 serv-
ice 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 appli-
cable dollar threshold (as defined in subsection (y))
for such year;’’.
(2) APPLICABLE
DOLLAR
THRESHOLD.—Sec-
tion 3121 of such Code is amended by adding at the
end the following new subsection:
‘‘(y) APPLICABLE DOLLAR THRESHOLD FOR DOMES-
TIC 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 para-
graph (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 amend-
ed—
(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 serv-
ice 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 appli-
cable 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 para-
graph (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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