Hi all,

I'm new to this group - thanks in advance for any thoughts or feedback.

In 2012, I will employ three different household employees in the state of Illinois and I'm trying to figure out: 1) how I report this on my individual tax return; 2) what taxes I need to pay / withhold; 3) what forms I need to give the employee.

#1 is straightforward - I think - in that I use Schedule H to report for all three employees. I'm hoping that my tax software program will walk me through this next year when I file.

#2 and #3 are more complex. Here are the 3 scenarios that I am facing, and where I am landing after having read IRS Publication 926 and Illinois Publication 121.

Employee 1: Nanny paid more than $1800 in 2012
--> What taxes are paid / withheld
- have to pay FICA - 7.65% for employer, 5.65% for employee
- have to pay FUTA (this is paid on our individual income tax)
- have to pay IL state unemployment tax quarterly
--> What form employee gets
- have to give W-2 form, copies B, C, and 2 to employee by Jan 31 and send Copy A and W-3 to SSA by Apr 2 if submitting electronically
- can withhold income tax if they want - get W-4 if so

Employee 2: Nanny paid less than $1800 in 2012 but more than $1000 in one quarter
--> What taxes are paid / withheld
- do not have to pay FICA
- have to pay FUTA (again, paid on our individual income tax)
- have to pay IL state unemployment tax quarterly
--> What form employee gets
- do not have to give W-2 form to employee (see pub 926, page 9)
QUESTION - does the employee get any form? i.e., does she have to report this income?

Employee 3: Household cleaner paid more than $600 but less than $1800 in 2012 and less than $1000 in quarter
--> What taxes are paid / withheld
- do not have to pay FICA
- do not have to FUTA
- do not have to pay IL state unemployment quarterly
--> What form employee gets
- do not have to give W-2