H. R. 4278
One Hundred Third Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the twenty-fifth day of January, one thousand nine hundred and ninety-four
An Act
To make improvements in the old-age, survivors, and disability insurance program
under title II of the Social Security Act.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Social Security Domestic Employ-
ment Reform Act of 1994’’.
SEC. 2. SIMPLIFICATION OF EMPLOYMENT TAXES ON DOMESTIC
SERVICES.
(a) THRESHOLD REQUIREMENT FOR SOCIAL SECURITY TAXES.—
(1) AMENDMENTS OF INTERNAL REVENUE CODE.—
(A) GENERAL
RULE.—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 (including domestic 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 (x)) for such year;’’.
(B) APPLICABLE DOLLAR THRESHOLD.—Section 3121 of
such Code is amended by adding at the end thereof the
following new subsection:
‘‘(x) APPLICABLE DOLLAR THRESHOLD.—For purposes of sub-
section (a)(7)(B), the term ‘applicable dollar threshold’ means
$1,000. In the case of calendar years after 1995, the Commissioner
of Social Security shall adjust such $1,000 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 paragraph, 1993 shall be substituted for the calendar year
referred to in section 215(a)(1)(B)(ii)(II) of such Act. If any amount
as adjusted under the preceding sentence is not a multiple of
$100, such amount shall be rounded to the next lowest multiple
of $100.’’.
(C) EMPLOYMENT OF DOMESTIC EMPLOYEES UNDER AGE
EXCLUDED
FROM
COVERAGE.—Section 3121(b) of such
Code (defining employment) is amended—
(i) by striking ‘‘or’’ at the end of paragraph (19),
(ii) by striking the period at the end of paragraph
(20) and inserting ‘‘; or’’, and
H. R. 4278—2
(iii) by adding at the end the following new para-
graph:
‘‘(21) domestic service in a private home of the employer
which—
‘‘(A) is performed in any year by an individual under
the age of 18 during any portion of such year; and
‘‘(B) is not the principal occupation of such employee.’’.
(D) CONFORMING AMENDMENTS.—The second sentence
of section 3102(a) of such Code is amended—
(i) by striking ‘‘calendar quarter’’ each place it
appears and inserting ‘‘calendar year’’, and
(ii) by striking ‘‘$50’’ and inserting ‘‘the applicable
dollar threshold (as defined in section 3121(x)) for such
year’’.
(2) AMENDMENT OF SOCIAL SECURITY ACT.—
(A) GENERAL
RULE.—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 cal-
endar year to an employee for domestic service in a private
home of the employer (including domestic 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(x) of the Internal Revenue Code of 1986) for such year;’’.
(B) EMPLOYMENT OF DOMESTIC EMPLOYEES UNDER AGE
18 EXCLUDED FROM COVERAGE.—Section 210(a) of such Act
(42 U.S.C. 410(a)) is amended—
(i) by striking ‘‘or’’ at the end of paragraph (19),
(ii) by striking the period at the end of paragraph
(20) and inserting ‘‘; or’’, and
(iii) by adding at the end the following new para-
graph:
‘‘(21) Domestic service in a private home of the employer
which—
‘‘(A) is performed in any year by an individual under
the age of 18 during any portion of such year; and
‘‘(B) is not the principal occupation of such employee.’’.
(3) EFFECTIVE DATES.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), the amendments made by this subsection shall apply
to remuneration paid after December 31, 1993.
(B) EXCLUDED EMPLOYMENT.—The amendments made
by paragraphs (1)(C) and (2)(B) shall apply to services
performed after December 31, 1994.
(4) NO
LOSS
OF
SOCIAL
SECURITY
COVERAGE
FOR
1994;
CONTINUATION OF W–2 FILING REQUIREMENT.—Notwithstanding
the amendments made by this subsection, if the wages (as
defined in section 3121(a) of the Internal Revenue Code of
1986) paid during 1994 to an employee for domestic service
in a private home of the employer are less than $1,000—
(A) the employer shall file any return or statement
required under section 6051 of such Code with respect
to such wages (determined without regard to such amend-
ments), and
(B) the employee shall be entitled to credit under sec-
tion 209 of the Social Security Act with respect to any
H. R. 4278—3
such wages required to be included on any such return
or statement.
(b) COORDINATION
OF
COLLECTION
OF
DOMESTIC
SERVICE
EMPLOYMENT TAXES WITH COLLECTION OF INCOME TAXES.—
(1) 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 thereof 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 sec-
tion—
‘‘(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 cal-
endar year, and
‘‘(3) no requirement to make deposits (or to pay install-
ments under section 6157) shall apply with respect to such
taxes.
‘‘(b) DOMESTIC SERVICE EMPLOYMENT TAXES SUBJECT TO ESTI-
MATED 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) EMPLOYERS NOT OTHERWISE REQUIRED TO MAKE ESTI-
MATED
PAYMENTS.—Paragraph (1) shall not apply to any
employer for any calendar year if—
‘‘(A) no credit for wage withholding is allowed under
section 31 to such employer for the taxable year of the
employer which begins in such calendar year, and
‘‘(B) no addition to tax would (but for this section)
be imposed under section 6654 for such taxable year by
reason of section 6654(e).
‘‘(3) 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).
‘‘(4) TRANSITIONAL RULE.—In the case of any taxable year
beginning before January 1, 1998, no addition to tax shall
be made under section 6654 with respect to any underpayment
to the extent such underpayment was created or increased
by this section.
‘‘(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 pursu-
ant to an agreement under section 3402(p).
H. R. 4278—4
For purposes of this subsection, the term ‘domestic service in a
private home of the employer’ includes domestic service described
in section 3121(g)(5).
‘‘(d) EXCEPTION WHERE EMPLOYER LIABLE FOR OTHER EMPLOY-
MENT 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 chap-
ter 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 trans-
ferred 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).’’.
(2) CLERICAL AMENDMENT.—The table of sections for chap-
ter 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.’’.
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to remuneration paid in calendar years
beginning after December 31, 1994.
(4) EXPANDED INFORMATION TO EMPLOYERS.—The Secretary
of the Treasury or the Secretary’s delegate shall prepare and
make available information on the Federal tax obligations of
employers with respect to employees performing domestic serv-
ice in a private home of the employer. Such information shall
also include a statement that such employers may have obliga-
tions with respect to such employees under State laws relating
to unemployment insurance and workers compensation.
SEC. 3. ALLOCATIONS TO FEDERAL DISABILITY INSURANCE TRUST
FUND.
(a) ALLOCATION WITH RESPECT TO WAGES.—Section 201(b)(1)
of the Social Security Act (42 U.S.C. 401(b)(1)) is amended by
striking ‘‘(O) 1.20 per centum’’ and all that follows through ‘‘Decem-
H. R. 4278—5
ber 31, 1999, and so reported,’’ and inserting ‘‘(O) 1.20 per centum
of the wages (as so defined) paid after December 31, 1989, and
before January 1, 1994, and so reported, (P) 1.88 per centum of
the wages (as so defined) paid after December 31, 1993, and before
January 1, 1997, and so reported, (Q) 1.70 per centum of the
wages (as so defined) paid after December 31, 1996, and before
January 1, 2000, and so reported, and (R) 1.80 per centum of
the wages (as so defined) paid after December 31, 1999, and so
reported,’’.
(b) 
ALLOCATION
WITH
RESPECT
TO
SELF-EMPLOYMENT
INCOME.—Section 201(b)(2) of such Act (42 U.S.C. 401(b)(2)) is
amended by striking ‘‘(O) 1.20 per centum’’ and all that follows
through ‘‘December 31, 1999,’’ and inserting ‘‘(O) 1.20 per centum
of the amount of self-employment income (as so defined) so reported
for any taxable year beginning after December 31, 1989, and before
January 1, 1994, (P) 1.88 per centum of the amount of self-employ-
ment income (as so defined) so reported for any taxable year begin-
ning after December 31, 1993, and before January 1, 1997, (Q)
1.70 per centum of the amount of self-employment income (as
so defined) so reported for any taxable year beginning after Decem-
ber 31, 1996, and before January 1, 2000, and (R) 1.80 per centum
of the amount of self-employment income (as so defined) so reported
for any taxable year beginning after December 31, 1999,’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply with respect to wages paid after December 31, 1993,
and self-employment income for taxable years beginning after such
date.
(d) STUDY ON RISING COSTS OF DISABILITY BENEFITS.—
(1) IN
GENERAL.—As soon as practicable after the date
of the enactment of this Act, the Commissioner of Social Secu-
rity shall conduct a comprehensive study of the reasons for
rising costs payable from the Federal Disability Insurance Trust
Fund.
(2) MATTERS TO BE INCLUDED IN STUDY.—In conducting
the study under this subsection, the Commissioner of Social
Security shall—
(A) determine the relative importance of the following
factors in increasing the costs payable from the Trust Fund:
(i) increased numbers of applications for benefits;
(ii) higher rates of benefit allowances; and
(iii) decreased rates of benefit terminations; and
(B) identify, to the extent possible, underlying social,
economic, demographic, programmatic, and other trends
responsible for changes in disability benefit applications,
allowances, and terminations.
(3) REPORT.—Not later than October 1, 1995, the Commis-
sioner of Social Security shall transmit a report to the Commit-
tee on Ways and Means of the House of Representatives and
the Committee on Finance of the Senate setting forth the
results of the study conducted under this subsection, together
with any recommendations for legislative changes which the
Commissioner determines appropriate.
H. R. 4278—6
SEC. 4. NONPAYMENT OF BENEFITS TO INCARCERATED INDIVIDUALS
AND INDIVIDUALS CONFINED IN CRIMINAL CASES PURSU-
ANT TO CONVICTION OR BY COURT ORDER BASED ON FIND-
INGS OF INSANITY.
(a) IN GENERAL.—Section 202(x) of the Social Security Act
(42 U.S.C. 402(x)) is amended—
(1) in the heading, by inserting ‘‘and Certain Other Inmates
of Publicly Funded Institutions’’ after ‘‘Prisoners’’;
(2) by striking ‘‘(x)(1) Notwithstanding’’ and all that follows
through the end of paragraph (1) and inserting the following:
‘‘(x)(1)(A) Notwithstanding any other provision of this title,
no monthly benefits shall be paid under this section or under
section 223 to any individual for any month during which such
individual—
‘‘(i) is confined in a jail, prison, or other penal institution
or correctional facility pursuant to his conviction of an offense
punishable by imprisonment for more than 1 year (regardless
of the actual sentence imposed), or
‘‘(ii) is confined by court order in an institution at public
expense in connection with—
‘‘(I) a verdict or finding that the individual is guilty
but insane, with respect to an offense punishable by impris-
onment for more than 1 year,
‘‘(II) a verdict or finding that the individual is not
guilty of such an offense by reason of insanity,
‘‘(III) a finding that such individual is incompetent
to stand trial under an allegation of such an offense, or
‘‘(IV) a similar verdict or finding with respect to such
an offense based on similar factors (such as a mental
disease, a mental defect, or mental incompetence).
‘‘(B)(i) For purposes of clause (i) of subparagraph (A), an individ-
ual shall not be considered confined in an institution comprising
a jail, prison, or other penal institution or correctional facility
during any month throughout which such individual is residing
outside such institution at no expense (other than the cost of mon-
itoring) to such institution or the penal system or to any agency
to which the penal system has transferred jurisdiction over the
individual.
‘‘(ii) For purposes of clause (ii) of subparagraph (A), an individ-
ual confined in an institution as described in such clause (ii) shall
be treated as remaining so confined until—
‘‘(I) he or she is released from the care and supervision
of such institution, and
‘‘(II) such institution ceases to meet the individual’s basic
living needs.’’;
and
(3) in paragraph (3), by striking ‘‘any individual’’ and all
that follows and inserting ‘‘any individual who is confined as
described in paragraph (1) if the confinement is under the
jurisdiction of such agency and the Commissioner of Social
Security requires such information to carry out the provisions
of this section.’’.
(b) EFFECTIVE DATE.—The amendments made by this section
shall apply with respect to benefits for months commencing after
90 days after the date of the enactment of this Act.
H. R. 4278—7
SEC. 5. ADDITIONAL DEBT COLLECTION PRACTICES.
(a) IN GENERAL.—Section 204 of the Social Security Act (42
U.S.C. 404) is amended by adding at the end the following new
subsection:
‘‘(f)(1) With respect to any delinquent amount, the Commis-
sioner of Social Security may use the collection practices described
in sections 3711(f), 3716, and 3718 of title 31, United States Code,
as in effect on October 1, 1994.
‘‘(2) For purposes of paragraph (1), the term ‘delinquent amount’
means an amount—
‘‘(A) in excess of the correct amount of payment under
this title;
‘‘(B) paid to a person after such person has attained 18
years of age; and
‘‘(C) determined by the Commissioner of Social Security,
under regulations, to be otherwise unrecoverable under this
section after such person ceases to be a beneficiary under
this title.’’.
(b) CONFORMING AMENDMENT.—Section 3701(d) of title 31,
United States Code, is amended by inserting ‘‘, except to the extent
provided under section 204(f) of such Act (42 U.S.C. 404(f)),’’ after
‘‘the Social Security Act (42 U.S.C. 301 et seq.)’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply to collection activities begun on or after the date of
the enactment of this Act and before October 1, 1999.
SEC. 6. NURSING HOMES REQUIRED TO REPORT ADMISSIONS OF SSI
RECIPIENTS.
(a) IN GENERAL.—Section 1631(e)(1) of the Social Security Act
(42 U.S.C. 1383(e)(1)) is amended by adding at the end the following
new subparagraph:
‘‘(C) For purposes of making determinations under section
1611(e), the requirements prescribed by the Commissioner of Social
Security pursuant to subparagraph (A) of this paragraph shall
require each administrator of a nursing home, extended care facility,
or intermediate care facility, within 2 weeks after the admission
of any eligible individual or eligible spouse receiving benefits under
this title, to transmit to the Commissioner a report of the
admission.’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply to admissions occurring on or after October 1, 1995.
H. R. 4278—8
SEC. 7. RULE OF CONSTRUCTION.
Until March 31, 1995, any reference in this Act (other than
section 3(d)) or any amendment made by this Act to the Commis-
sioner of Social Security shall be deemed a reference to the Sec-
retary of Health and Human Services.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.