Social Security Domestic Employment Reform Act of 1994
PL 103-387 (H.R.4278), enacted 10/22/1994

PUBLIC LAW 103-387—OCT. 22, 1994 
108 STAT. 4071 
Public Law 103-387 
103d Congress 
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 appHcable dollar threshold 
(as defined in subsection (x)) for such year;". 
(B) APPUCABLE DOLLAR THRESHOLD.—Section 3121 of 
such Code is amended by adding at the end tiiereof the 
following new subsection: 
"(x) APPLICABLE DOLLAR THRESHOLD.—For purposes of sub-
section (a)(7XB), the term 'appUcable dollar tirreshold' means 
$1,000. In the case of calendar years after 1995, the Commissioner 
of Social Security shaU ac^ust such $1,000 amoimt at the same 
time and in the same manner as imder section 215(a)(l)(B)(ii) 
of the Social Security Act with respect to the amounts referred 
to in section 215(a)(l)(B)(i) of such Act, except tiaat, for purposes 
of this paragraph, 1993 shall be substituted for the calendar year 
referred to in section 215(a)(l)(B)(u)(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 
18 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 
Oct. 22,1994 
[H.R. 4278] 
Social Security 
Domestic 
Employment 
Reform Act of 
1994. 
26 u s e 1 note. 
26 u s e 3121. 
108 STAT. 4072 
PUBLIC LAW 103-387—OCT. 22, 1994 
(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 
TB) is not the principal occupation of such employee.". 
(D) CONFORMING AMENDMENTS.—The second sentence 
of section 3102(a) of such Code is simended— 
(i) by striking "calendar quarter" each place it 
appears and inserting "calendar year'', and 
(ii) by striking "$50" and inserting "the appUcable 
dollar threshold (as defined in section 3121(x)) tor 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 remimeration paid by an employer in any cal-
endar year to an employee tor 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 me applicable dollar threshold (EIS 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 £m.y 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.". 
26 use 3102 
(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) slmll apply to services 
performed after December 31,1994. 
26 use 3102 
(4) No LOSS OF SOCIAL SECURITY COVERAGE FOR 1994; 
°°*®- 
CONTINUATION OF w-2 FIUNG 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 me any return or statement 
required under section 6051 of such Code witii respect 
to such wages (determined without regard to such amend-
ments), and 
(B) the employee shall be entitied to credit under sec-
tion 209 of the Social Security Act with respect to any 
PUBLIC LAW 103-387—OCT. 22, 1994 
108 STAT. 4073 
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. 3610. 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 
appHcation 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 shaU 
be made imder 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 fix)m such remuneration pursu-
ant to an agreement under section 3402(p). 
108 STAT. 4074 
PUBLIC LAW 103-387—OCT. 22, 1994 
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 nome 
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 amoimt collected 
under an agreement referred to in paragraph (1) shall be trans-
ferred by the Secretary to the account of the State in the 
Unemplcmnent Trust Fund. 
"(3) SUBTITLE F MADE APPUCABLE.—For purposes of subtitie 
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)(l).''. 
(2) CLERICAL AMENDMENT.—The table of sections for chap-
ter 25 of such Code is Eimended by adding at the end thereof 
the following: 
"Sec. 3510. Coordination of collection of domestic service employment taxes 
with collection of income taxes.". 
26 use 3510 
(3) EFFECTIVE DATE.—The amendments made by this sub-
"°^- 
section shall apply to remuneration paid in calendar years 
beginning after December 31,1994. 
26 use 3510 
(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 obUgations of 
emi)loyers 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-
PUBLIC LAW 103-387—OCT. 22, 1994 
108 STAT. 4075 
ber 31, 1999, and so reported," and inserting "(0) 1.20 per centum 
of the wages (as so defined) paid after December 31, 1989, and 
before Janusuy 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 sifter 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(bX2) 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 amoimt of self-employ-
ment income (as so defined) so reported for smy taxable year begin-
ning after December 31, 1993, and before January 1, 1997, (Q) 
1.70 per centum of the amount of self-emplojnnent 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 42 use 40i note, 
shall apply with respect to wages paid after December 31, 1993, 
and self-emplojmient income for taxable years beginning after such 
date. 
(d) STUDY ON RISING COSTS OF DISABIUTY BENEFITS.— 
(1) IN GENERAI..—^As soon as practicable after the date 
of the enactment of this Act, the Conmiissioner of Social Secu-
rity shall conduct a comprehensive study of the reasons for 
rising costs payable 
fix)m 
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 
fix)m 
the Trust Fund: 
(i) increased ntmibers of apphcations for benefits; 
(ii) higher rates of 
benefit allowances; and 
(iii) decreased rates of benefit terminations; and 
(B) identify, to the extent possible, underlying socisil, 
economic, demographic, programmatic, and otiier trends 
responsible for changes in disabUity benefit apphcations, 
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 Conmnttee on Finance of the Senate setting forth the 
results of the study conducted imder this subsection, together 
with any recommendations for legislative changes which the 
Commissioner determines appropriate. 
108 STAT. 4076 
PUBLIC LAW 103-387—OCT. 22, 1994 
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 PubUcly Fimded Institutions" after "Prisoners"; 
(2) by striking "(x)(l) Notwithstanding" and all that foUows 
through the end of paragraph (1) and inserting the following: 
"(x)(l)(A) Notwithstanding any other provision of this titie, 
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 pubUc 
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 subpsu^graph (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 fix)m the care and supervision 
of such institution, and 
"(II) such institution ceases to meet the individual's basic 
Hving needs."; 
and 
(3) in paragraph (3), by striking "any individual" and all 
that foUows 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.". 
42 use 402 note. 
(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. 
PUBLIC LAW 103-387—OCT. 22, 1994 
108 STAT. 4077 
SEC. 5. ADDITIONAL DEBT COLLECTION PRACTICES. 
(a) IN GENERAL.—Section 204 of the Social Seciirity Act (42 
U.S.C. 404) is amended by adding at the end the following new 
subsection: 
"(£)(!) With respect to any delinquent simount, the Commis-
sioner of Social Security may use the collection practices described 
in sections 3711(f), 3716, and 3718 of titie 31, United States Code, 
as in effect on October 1,1994. 
"(2) For purposes of paragraph (1), the term 'delinquent amoimt' 
means an amoimt— 
"(A) in excess of the correct amount of payment under 
this titie; 
"(B) paid to a person after such person has attained 18 
years of age; and 
"(C) determined by the Commissioner of Social Security, 
imder regulations, to be otherwise unrecoverable under this 
section after such person ceases to be a beneficiary under 
this titie.". 
(b) CONFORMING AMENDMENT.—Section 3701(d) of titie 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 31 use 3701 
shall apply to collection activities begun on or after the date of *^°^' 
the enactment of 
this Act and before October 1,1999. 
SEC. 6. NUBSING 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 imder 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 eUgible individual or eUgible spouse receiving benefits under 
this titie, to transmit to the Commissioner a report of tlie 
admission.". 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 42 use 1383 
shall apply to admissions occurring on or after October 1, 1995. ^°^-
108 STAT. 4078 
PUBLIC LAW 103-387—OCT. 22, 1994 
42 u s e 402 note. 
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 Conmiis-
sioner of Social Security shall be deemed a reference to the Sec-
retary of Health and Human Services. 
Approved October 22, 1994. 
LEGISLATIVE HISTORY—H.R. 4278 (S. 1231): 
HOUSE REPORTS: Nos. 103-491 (Comm. on Ways and Means) and 103-842 (Comm. of 
OoixfcrGiiCG). 
SENATE REPORTS: No. 103-252 accompanying S. 1231 (Comm. on Finance). 
CONGRESSIONAL RECORD, VoL 140 (1994): 
May 10, 12, considered and passed House. 
May 25, considered and passed Senate, amended, in lieu of S. 1231. 
Oct. 6, House and Senate agreed to conference report. 
o