I
103D CONGRESS
1ST SESSION
H. R. 899
To amend title II of the Social Security Act and the Internal Revenue
Code of 1986 to increase the minimum amount of cash remuneration
payable to a domestic employee in any year which is subject to social
security employment taxes, to provide for annual adjustments in such
minimum amount, and to simplify the payment of such employment
taxes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 16, 1993
Mr. KLUG 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 the minimum amount
of cash remuneration payable to a domestic employee
in any year which is subject to social security employ-
ment taxes, to provide for annual adjustments in such
minimum amount, and to simplify the payment of such
employment taxes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Social Security Domes-
tic Employment Tax Simplification Act of 1993’’.
SEC. 2. INCREASE IN MINIMUM AMOUNT OF CASH REMU-
NERATION FOR DOMESTIC SERVICES SUB-
JECT TO SOCIAL SECURITY EMPLOYMENT
TAXES.
(a) DETERMINATION OF WAGES UNDER THE SOCIAL
SECURITY ACT.—Subparagraph (B) of section 209(a)(6)
of the Social Security Act is amended to read as follows:
‘‘(B)(i) Cash remuneration paid by an employer
in any calendar year to an employee for domestic
service in a private home of the employer, if the cash
remuneration paid in such year by the employer to
the employee for such service is less than the mini-
mum assessed wages determined under this subpara-
graph for such year.
‘‘(ii) The minimum assessed wages for 1993
shall be the product of $200 and the ratio of the av-
erage of the total wages (as defined in regulations
of the Secretary and computed without regard to the
limitations specified in section 209(a)(1)) for 1992
to the average of the total wages (as so defined) for
1950, with such product, if not a multiple of $10,
being rounded to the next higher multiple of $10
where such amount is a multiple of $5 but not of
$10 and to the nearest multiple of $10 in any other
case.
‘‘(iii) The Secretary shall, on or after November
1 of 1993 and of every year thereafter, determine
and publish in the Federal Register the minimum
assessed wages for the succeeding calendar year.
The amount of such minimum assessed wages shall
be the larger of—
‘‘(I) the amount in effect for the calendar
year in which the determination under this
clause is made, or
‘‘(II) the product of the minimum assessed
wages for 1993 and the ratio of the deemed av-
erage total wages (as defined in section
209(k)(1)) for the calendar year before the year
in which the determination under this clause is
made to the deemed average total wages (as so
defined) for 1991,
with such product, if not a multiple of $10, being
rounded to the next higher multiple of $10 where
such amount is a multiple of $5 but not of $10 and
to the nearest multiple of $10 in any other case.
‘‘(iv) As used in this subparagraph, the term
‘domestic service in a private home of the employer’
does not include service described in section
210(f)(5).’’.
(b) DETERMINATION OF WAGES UNDER THE INTER-
NAL REVENUE CODE OF 1986.—
(1) IN GENERAL.—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 em-
ployer in any calendar year to an employee for
domestic service in a private home of the em-
ployer, if the cash remuneration paid in such
year by the employer to the employee for such
service is less than the minimum assessed
wages determined under section 209(a)(6)(B)
of the Social Security Act for such year. As
used in this subparagraph, the term ‘domestic
service in a private home of the employer’ does
not include service described in subsection
(g)(5);’’.
(2) CONFORMING
AMENDMENT.—The second
sentence of section 3102(a) of such Code (relating to
deduction of tax from wages) is amended—
(A) by striking ‘‘calendar quarter’’ each
place it appears and inserting ‘‘calendar year’’,
and
(B) by striking ‘‘$50’’ and inserting ‘‘the
minimum assessed wages determined under sec-
tion 209(a)(6)(B) of the Social Security Act for
such year’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to remuneration paid in calendar
years after 1992. As soon as practicable after the date
of the enactment of this Act, the Secretary of Health and
Human Services shall publish in the Federal Register the
minimum assessed wages for 1993, determined under
section 209(a)(6)(B)(ii) of the Social Security Act (as
amended by this Act).
SEC. 3. COORDINATION OF COLLECTION OF DOMESTIC
SERVICE EMPLOYMENT WITH COLLECTION
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 due date (including ex-
tensions) of the income tax return for 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
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 re-
spect to remuneration for services other than domestic
service in a private home of the employer.
‘‘(e) 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 remunera-
tion paid for domestic service in a private home of
the employer. Any taxes to be collected by the Sec-
retary pursuant to such an agreement shall be treat-
ed as domestic service employment taxes for pur-
poses 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 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 after 1992.
SEC. 4. STUDY REGARDING MINIMUM ASSESSED WAGES
FOR DOMESTIC SERVICE.
(a) IN GENERAL.—The Secretary of Health and
Human Services and the Secretary of the Treasury shall
conduct a joint study of the effects of the amendments
made by this Act. In the course of such study, the Sec-
retaries shall—
(1) analyze the effect of the amounts of mini-
mum assessed wages established pursuant to such
amendments on the integrity of the Federal Old-Age
and Survivors Insurance Trust Fund, the Federal
Disability Insurance Trust Fund, and the Federal
Hospital Insurance Trust Fund,
(2) evaluate the annual savings to the Govern-
ment caused by the annualization of the employment
taxes provided in such amendments, and
(3) such other related matters as they consider
appropriate.
(b) REPORT.—Not later than January 1, 1996, the
Secretaries shall transmit a report to the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate setting forth the re-