TN 25 (04-04)

Citations:

Sections 209(a)(6) and 210(a) of the Social Security Act;

Regulation No. 4, Sections 404.1038 and 404.1057 ;

P.L. 103-387 and P.L. 108-203

A. Policy – Wages and Coverage

1. 1994 and Later

Beginning in 1994, earnings by a domestic employee are taxable if the yearly earnings meet a coverage threshold set by the Office of the Actuary and if an exclusion to coverage does not apply. To find the Social Security coverage threshold amounts, see the Employment Coverage Threshold page (https://www.ssa.gov/oact/cola/CovThresh.html).

2. 1955 Through 1993

Cash and non-cash remuneration is excluded from wages unless a $50 per quarter cash pay test is met.

3. 1951 Through 1954 Inclusive

Domestic employment is covered. However, cash and non-cash remuneration is excluded from wages unless a regularity-of-employment and a $50 per quarter cash pay test are met.

4. Before 1951

All domestic employment is excluded.

B. Policy - Employment Exclusion

Beginning January 1, 1995, domestic service performed in the private home of the employer is excluded from coverage, regardless of the amount earned, if:

• Such service is performed in any year by an individual who was under the age of 18 during any portion of such year; and

• Domestic service is not the individual's principal occupation.

C. Definitions

1. Regularity-of-Employment Test

The regularity-of-employment test is met when the employee works for all or a portion of no fewer than 24 days in a calendar quarter.

2. Private Home

A private home is a fixed place of residence of a person or family.

3. $50 Cash Pay Test

The $50 cash pay test is met when the employee is paid $50 or more in a calendar quarter.

D. Definitions - Domestic Employment and Other Services

1. Domestic Service

In general, types of covered domestic employment for Social Security coverage purposes include service performed by the following:

Cooks, waiters, butlers, housemen, housekeepers, maids, valets, baby sitters, janitors, caretakers, grooms, gardeners, companions, handymen, footmen, laundresses, seamstresses, watchmen, governess, chauffeurs for family cars, and farm workers performing domestic service on a farm.

NOTE: Beginning January 1, 1995, domestic employees on farms operated for profit are no longer treated as agricultural employees. Instead they are subject to the new domestic threshold. (This is based on the enactment of P.L. 103-387 effective January 1, 1995 and reinforced with P.L. 108-203).

2. Other Service

The following are not considered domestic employment for Social Security coverage purposes.

• Employment in intellectual, cultural or scientific pursuits, hobbies, recreation, and positions as tutors, librarians, music teachers, secretaries, or bookbinders; or

• Employment needing specialized skills or training, such as a carpenter, painter, electrician, or plumber.

E. References

See RS 01402.215 and RS 01402.216 for treatment of wages for domestic service.

See RS 01901.250 for coverage of domestic service performed by a relative.

IRS Publication 926, Household Employer’s Tax Guide at http://www.irs.gov/pub/irs-pdf/p926.pdf

SSA Publication 05–10021 Household Workers (electronic fact sheet) at https://mwww.ba.ssa.gov/pubs/EN-05–10021pdf