Caregiver Agreement Independent Contractor
One of the benefits of hiring a caregiver through a home care agency or other staff agency is that the agency pays the caregiver and your share in the payment process is relatively simple: cut a weekly check to the staff agency of your choice. A caregiver is a person who is paid to care for another person, usually an elderly person or a person with special needs. A caregiver is paid to provide daily care such as transportation, meal preparation, household chores, and other needs of the individual. The caregiver usually follows a weekly schedule, either defined in the agreement or set by the parties. The first commitment is to classify the caregiver as an employed worker or self-employed holder for income tax purposes. Before the employer can know how to process payments to caregivers, the employer must make a critical decision about whether the caregiver is a self-employed contractor or a worker. Once the level of care has been set, a job description as detailed as possible should be written. You will want to indicate how many hours and days per week this care is needed and what particular skills/trainings are needed, such as.B experience with Alzheimer`s/dementia care. All duties that the caregiver must perform must be included in the job description. This could include: if the caregiver is considered a worker, the employer must withhold income tax, withhold and pay Social Security and Medicare taxes, and pay public and federal taxes on wages paid to the caregiver. This factor is problematic for the caregiver, but if most other factors indicate the status of an independent contractor, it should not tip the balance. Payment of mileage or meal fees for caregivers is common, whether they are an independent contractor or a staff relationship.
The IRS issued several rulings in which it found that the janitors were employees. It would therefore be very difficult to say that a janitor is an independent contractor. In unusual circumstances, a written contract would be required to document the status of independent contractor. Although not determinative, a written contract can show what the employer and guardian intend to do with respect to liability for withholding and paying taxes. If the caregiver is an employee, it is the employer`s responsibility to withhold, transfer and pay certain taxes if the caregiver`s salary exceeds a certain annual amount, currently $1700.00. The employer must withhold income tax and caregivers` share of Social Security and Medicare taxes. In addition, the employer is responsible for paying Social Security, Medicare, and unemployment taxes (FUTA and SUTA) on the caregiver`s salary. The employer is responsible for paying the worker`s share of the tax if the employer fails to withhold it correctly from the worker`s wage.
If the salaries of all employees in the household represent USD 1,000.00 or more in a calendar quarter, Schedule H must be submitted before the end of the month following the end of the quarter. If the employee earns $1700.00 or more per year, the employer must give the guardian a Form W-2, which is a payroll and tax return that shows the amount of wages and taxes earned that are withheld from the employee`s salary. . . .