2011

GettingStarted

DomesticEmployers
Maryland,Virginia,WashingtonD.C.

for

KaitlinLeighMason

TableofContents
GettingStartedforDomesticEmployersQuickFacts3 ObtainanFEIN...4 RegisterwithyourState.....6 Virginia.7 Maryland........8 Washington,D.C.......9

FilingRequirements...10 Virginia..11 Maryland.....14 Washington,D.C.....16 Federal......18

WorkersCompensationInsurance.19 Virginia..20 Maryland..20 Washington,D.C.20

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GettingStartedforDomestic EmployersQuickFacts
1) Youpayunemploymentinsuranceinthestatethatyouremployee worksandNOTwheretheylive. 2) AsaDomesticEmployer,youDONOThavetowithholdFederaland Stateincometaxes,unlessyouremployeerequeststhatyoudo. 3) Youneedtodecideifyouaregoingtopayforbothyoursandyour employeesportionsofSocialSecurity&Medicaretaxesorjustyour ownportion.Ifyouaregoingtopayjustforyourownportion,then youneedtowithholdSocialSecurity&Medicaretaxfromyour employeespay.EmployeesSocialSecurity&Medicaretaxtotal 5.65%ofwagespaidfor2011.Employersportionis7.65%ofwages paid.Paymentswillberemittedwithyourannualincometaxreturn onScheduleH. 4) MinimumWage: (1) (2) (3) VA$7.25 MD$7.25 DC$8.25

5) PaycheckCalculatorTool:http://www.paycheckcity.com/

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 Step1 ObtainanFEIN

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ObtainanFEIN(FederalEmployer IdentificationNumber)
i) Goto:www.irs.gov ii) UndertheOnlineServicessectiononthelefthandsideofthescreen,clickonApply foranEmployerIdentificationNumber(EIN)Online iii) ScrolltobottomandclickonAPPLYONLINENOW iv) ReadinstructionsandthenclickonBeginApplication v) CheckSoleProprietorandclickContinue vi) CheckHouseholdEmployerandclickContinue vii) viii) ReadandclickContinue FillinrequestedinformationandclickContinue

Note:IfyoualreadyhaveanFEINforaScheduleCbusinessunderyourSS#,thenyou arenotabletoreceiveasecondFEINforyourDomesticEmployee.Thissometimes cancauseproblemsifthesameFEINisusedfortheScheduleCbusinessandforthe DomesticEmployee.Itleadstounwantedtaxnotices.Therefore,itwouldbe preferredthatyougettheDomesticEmployeeFEINunderyourspousesSS#,if possible.Wewanttoavoidtaxnoticesasmuchaspossibleandyouwanttokeep businessseparatefrompersonal.ItisveryeasytogetaFEINandwecandoitforyou, ifrequested.

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 Step2 Registerwithyour State

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Virginia
a) Registering:
(1) Goto: https://www.ireg.tax.virginia.gov/VTOL/Login.seam (2) ScrolltothebottomandunderRegisteraNewBusinessclickRegister (3) Fillinallrequestedinformation. (4) AtthebottomunderRegistrationChoices: (a) IftheemployeeworksandlivesinVAandwantsVAtaxwithheldselect: RegisterwithboththeVirginiaDepartmentofTaxationandVirginia EmploymentCommission (b) IftheemployeeworksinVAbutdoesnotwantstatetaxwithheldorifthe employeeworksinVAbutlivesinanotherstate(youwillhavetoregister withthatstateifhe/shewantsthatstatestaxwithheld)select: OnlyregisterwiththeVirginiaEmploymentCommission. (c) IftheemployeeworksinanotherstatebuttheemployeelivesinVAand wantsVAtaxwithheldselect: OnlyregisterwiththeDepartmentofTaxation

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Maryland
a) Registering:
(1) Goto:http://www.marylandtaxes.com/default.asp
(2) ClickonOnlineServices (3) ScrolldowntoServicesforBusinessesandclickonBusiness Registration (4) ScrolltobottomandselectBeginRegistration (5) RegistrationType: (a) SelectEmployerWithholdingTaxAccountiftheemployerhasan employeethatlivesinMDandwantsMDtaxwithheldfromtheirpay. Regardingpayfrequency: (i) AcceleratedFilersEmployerswhoarerequiredtowithhold $15,000ormorefortheprecedingcalendaryearandalsohave accumulated$700ofwithholdingtax,inanypayperiod. (ii) QuarterlyFilersEmployerswithlessthan$700ofwithholding perquarter. (iii) MonthlyEmployerswithmorethan$700ofwithholdingin anyonequarter. (iv) AnnuallyEmployerswithlessthan$250withholdingper calendaryeararerequiredtoremitthetaxwithheldonan annualbasis. (v) SeasonallyEmployerswhooperateonlyduringcertainmonths mustobtainpriorapprovaltofileseasonally. (b) SelectUnemploymentInsuranceforemployeesworkinginMDso thatyoucanpaytheunemploymenttaxes. (c) Selectboth(a)and(b)ifbothapply. (6) ClickContinue

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WashingtonD.C.
a) Registering:
(1) Goto: https://www.taxpayerservicecenter.com/fr500/ (Youcanregisterforbothunemploymenttaxesandforwithholdingtaxes here) (2) ScrolltobottomandclickContinue (3) FillinrequestedPersonalInformationandclickContinue (4) TheLegalformofbusinessisSoleProprietor (5) YourMainBusinessDescription:OtherServices (6) YourBusinessCategory:PrivateHouseholds (7) YourBusinessActivityCode(NAICS):81411PrivateHouseholds (8) FillinremainingrequestedinformationandclickContinue

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Step3 FilingRequirements

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Virginia
a) UnemploymentInsuranceFilingRequirements:
(1) EmployerslocatedinVAmustfileQuarterlyUnemploymentReports: (a) Forms: http://www.vec.virginia.gov/vecportal/employer/pdf/fc_20_21.pdf (b) InstructionsandDueDates: http://www.vec.virginia.gov/vecportal/employer/pdf/fc_20_21ins.pdf (c) Taxesarepaidonfirst$8,000ofwages (d) Domesticemployerswhohaveahistoryofquarterlypayrollsofless than$5,000,maybeofferedtheoptiontofileVECreportsonanannual basis.Thiswillonlybedoneifapprovedinadvance.

b) VAIncomeTaxWithholdingFilingRequirements:
(1) WithholdingCertificate: (a) TobefilledoutbytheemployeewishingtohaveVAtaxeswithheld fromtheirpay: (i) http://www.tax.virginia.gov/ (ii) UndertheServicessectiononthelefthandsideofthescreen, clickNeedaForm? (iii) UnderBusinessFormsandInstructions,clickonDownload forms (iv) Selectacategorytoview:WithholdingTax

(v) ClickonformVA4EmployeesWithholdingExemption Certificate

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(2) WithholdingReports: (a) Thesereportsarerequiredforemployerswhohaveemployeeshaving VAtaxwithheldfromtheirpay.OnceyouregisterwiththeVA Departmentoftaxation,theywillassigntoyouwhichfilingstatusyou shoulduse(i.e.quarterly,monthly,orsemiweekly)andshouldsend youthenecessaryforms.NOTE:Householdemployersthathaveatotal payrollineachcalendarquarterthatdoesnotexceed$5,000,mayelect tofileannually.Seeinstructionsbelowforannualfilers.Iftheydonot sendyoutheforms,theyareavailableonline: a. Formonthlyandquarterlyfilers: i. ii. iii. iv. v. http://www.tax.virginia.gov/ UndertheServicessectiononthelefthandsideofthescreen, clickNeedaForm? UnderBusinessFormsandInstructions,clickonDownload forms Selectacategorytoview:WithholdingTax ClickonformVA5MonthlyEmployersReturnofVirginia IncomeTaxWithheldformonthlyandseasonalfilers

b. Forsemiweeklyfilers: i. ii. iii. iv. v. vi. http://www.tax.virginia.gov/ UndertheServicessectiononthelefthandsideofthescreen, clickNeedaForm? UnderBusinessFormsandInstructions,clickonDownload forms Selectacategorytoview:WithholdingTax ClickonformVA15EmployersVoucherforPaymentof VirginiaIncomeTaxWithheld(Semiweekly),and ClickonformVA16EmployersQuarterlyReconciliation ofVA15PaymentsandReturnofVirginiaIncomeTax Withheld(semiweeklyfilers)

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c. Forannualfilers: Toregisterforthisannualfilingoption,goto: i. ii. iii. iv. v. http://www.tax.virginia.gov/ UndertheServicessectiononthelefthandsideofthescreen, clickNeedaForm? UnderBusinessFormsandInstructions,clickonDownload forms Selectacategorytoview:Registration ClickonformR1HVirginiaHouseholdEmployer RegistrationForm

Fortheannualfilingforms: i. ii. iii. iv. v. http://www.tax.virginia.gov/ UndertheServicessectiononthelefthandsideofthescreen, clickNeedaForm? UnderBusinessFormsandInstructions,clickonDownload forms Selectacategorytoview:WithholdingTax ClickonformVA6HHouseholdEmployersAnnual SummaryofVirginiaIncomeTaxWithheldInstructions

(b) Duedates(scrolldowntoEmployerIncomeTaxWithholding): http://www.tax.virginia.gov/site.cfm?alias=filingrequirements

c) Withholdingcalculatortool:
(1) http://www.tax.virginia.gov/site.cfm?alias=whcalculator

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Maryland
a) UnemploymentInsuranceFilingRequirements:
(1) EmployerslocatedinMDarerequiredtopaytheirunemploymenttaxes quarterly.Therearetwowaystopay: (a) FileElectronically:

http://www.dllr.state.md.us/employment/uitax.shtml ClickonWebTaxYoursecureonlinesourceforemployer information,or

(b) Onthe"ContributionReturn"(DLLR/DUI15)andonthe"Employment Report"(DLLR/DUI16)suppliedbyMarylandDLLR. (2) Taxesarepaidonthefirst$8,500ofwagespaid (3) Thereturnsareduebytheendofthemonthfollowingtheendofthe quarter.

b) MDIncomeTaxWithholdingFilingRequirements:
(1) WithholdingCertificate: (a) TobefilledoutbytheemployeewishingtohaveMDtaxeswithheld fromtheirpay: http://forms.marylandtaxes.com/current_forms/mw507.pdf (2) WithholdingReports: (a) Youhavetwooptionsforfilingyouremployerwithholdingreports, FormMW506: (i) Fileelectronically:

a. Goto:http://www.marylandtaxes.com/default.asp
b. UnderMarylandTaxesBusinessTaxpayersinthelower righthandcorner,clickonbFile c. ClickonFileWithholdingReturns (ii) FileusingthepreprintedcouponsthatMDsendsyou. (3) FilingCategoriesandDueDatesBusinessesmustfilewithholdingreports accordingtothefollowingcategories:

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(a) AcceleratedFilersEmployerswhoarerequiredtowithhold$15,000 ormorefortheprecedingcalendaryearandalsohaveaccumulated $700ofwithholdingtax,inanypayperiod.Employersfiling acceleratedwithholdingreportsmustfilewithinthreebusinessdays followingthepayroll(paydate). (b) QuarterlyFilersEmployerswithlessthan$700ofwithholdingper quarter.Quarterlyincometaxwithholdingreturnsaredueonthe15th dayofthemonththatfollowsacalendarquarterinwhichincometax waswithheld. (c) MonthlyEmployerswithmorethan$700ofwithholdinginanyone quarter.Monthlyincometaxwithholdingreportsaredueonthe15th dayofthemonthfollowingthemonthinwhichtheincometaxwas withheld. (d) AnnuallyEmployerswithlessthan$250withholdingpercalendar yeararerequiredtoremitthetaxwithheldonanannualbasis. EmployersfilingannualreportsmustfileonorbeforeJanuary31inthe yearthatfollowstheyearinwhichtheincometaxwaswithheld. (e) SeasonallyEmployerswhooperateonlyduringcertainmonthsmust obtainpriorapprovaltofileseasonally. (4) AnnualEmployerReconciliationEmployersarealsorequiredtosubmita yearendreconciliationtotheComptrollerofMarylandbyFebruary28of eachyear,showingtheprioryear'swageandwithholdinginformationon FormMW508: (a) http://forms.marylandtaxes.com/current_forms/mw508.pdf

c) WithholdingCalculator:
(1) Goto:http://www.marylandtaxes.com/default.asp (2) UnderMarylandTaxesBusinessTaxpayersinthelowerrighthand corner,clickonBusinessTaxForms (3) UnderBusinessOnlineServices,clickonTaxCalculators (4) ClickontheEmployerWithholdingCalculators

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WashingtonD.C.
a) UnemploymentInsuranceFilingRequirements:
(1) Youcanchoosetofilequarterly(FormUC30)orannually(FormUC30H). (2) Bothquarterlyandannualreportingformsarepreprintedwiththe employernameandaddress,account#,quarterandyeartobereported, duedateandtaxratetobeusedincomputingthetaxdue. (3) QuarterlyfilersaremailedUC30sneartheendofeachquarter. (4) QuarterlyreportsaredueonApril30,July31,October31andJanuary31 (5) TheUC30HisdueonorbeforeApril15followingtheendofthetaxyear. (6) Taxespaidonfirst$9,000ofwagespaid (7) Youcannowsubmityourquarterlyreportsonlinethroughmagnetic media.Gotohttp://www.does.dc.gov/does/site/default.asp?doesNav=| formoreinformation.

b) DCIncomeTaxWithholdingRequirements:
(1) WithholdingCertificate: (a) TobefilledoutbytheemployeewishingtohaveDCtaxeswithheld fromtheirpay: http://otr.cfo.dc.gov/otr/cwp/view.asp?a=1330&Q=594086 ClickonFormD4EmployeeWithholdingAllowanceCertificate (2) WithholdingReports: (a) IfyourDCwithholdingtotalisconsistentlylessthan$200perperiod, youmustfileanannualwithholdingreturn.IfyourDCwithholdingis consistentlybetween$200and$800perperiod,youmustfilea quarterlywithholdingreturn.IfyourDCwithholdingisgreaterthan $800perperiod,youmustfileamonthlywithholdingreturn.Youmay calltheOfficeofTaxandRevenue(OTR)at(202)7274TAX(4829)to changeyourfilingfrequency.Ifyourliabilityismorethan$10,000per period,youmustfileandpayelectronically. (b) Reports&DueDates: http://otr.cfo.dc.gov/otr/cwp/view.asp?a=1330&Q=594086 (i) QuarterlyFR900Q;duebythe20thdayofthemonthfollowing thequarterbeingreported.

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(ii) MonthlyFR900M;duebythe20thdayofthemonthfollowing themonthbeingreported. (iii) (iv) AnnualFR900A;dueJanuary20th AnnualReconciliationFR900B;dueJanuary31st

(c) IfyoufilequarterlyormonthlyyouhavetofileaFormFR900B,the annualreconciliation. (3) IncomeTaxWithholdingInstructionsandTables: http://otr.cfo.dc.gov/otr/cwp/view.asp?a=1330&Q=593946

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Federal
a) EmploymentEligibilityVerification:
(1) Whenyouhireahouseholdemployeetoworkforyouonaregularbasis, youandtheemployeemustcompletetheU.S.CitizenshipandImmigration Services(USCIS)FormI9,EmploymentEligibilityVerification. (a) Goto:http://www.uscis.gov/portal/site/uscis (b) ClickonForms (c) ScrolldownandclickonFormI9EmploymentEligibility Verification

b) UnemploymentInsuranceFilingRequirements:
(1) FederalUnemploymentInsurancetaxeswillbepaidannuallywithyour incometaxreturnonScheduleH.

c) FederalIncomeTaxWithholdingFilingRequirements:
(1) WithholdingCertificate: (a) TobefilledoutbytheemployeewishingtohaveFederaltaxeswithheld fromtheirpay: (i) Goto:http://www.irs.gov/ (ii) UndertheFormsandPublicationssectionontheleftside,click onFormW4 (2) Anyfederalincometaxthatyouwithholdfromyouremployeespaywillbe paidannuallywithyourincometaxreturnonScheduleH.

d) FormsW2&W3
(1) Wecanpreparetheseformsforyoueachyear.W2sareduetothe recipientbyJanuary31st.

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 Step4 Workers Compensation Insurance

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Virginia
Domesticemployeesareexcludedfrommandatorycoverage.Coverageisvoluntary.

Maryland
Anydomesticworkerwhoseearningsare$1000ormoreinanycalendarquarterfroma privatehouseholdarerequiredtohavecoverage.Domesticservantsandtheir employersjointlymayelectfortheemployeetobecovered,eveniftheindividualdoes notmeettheearningsrequirement.

Domesticworkersemployedbythesameemployeratleast240hoursduringacalendar quarterarerequiredtohavecoverage.

WashingtonD.C.

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