Do you need an EIN to hire someone personally as a caregiver?

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Barbara123 Asked July 2015

Do you need an EIN to hire someone personally as a caregiver?

As my mother's POA, I am hiring a family member on behalf of my mom as her caregiver. She is an employee of my mother and have a caregiver agreement. She has completed a W-4 and I am having her fill out time sheets, taking out withholding, etc. As my mom is not a business, but has an employee, does she need an EIN or can I do this using her SSN? If she does need an EIN, does it matter that her money is in a living trust? (I am a co-trustee) and will I need to put the funds to pay her caregiver in a separate bank account from the one under her trust? I have been all over irs.gov and tried calling them several times, but I can't find an answer to these specific questions. She has the funds to pay and we are not needing financial assistance. I just want to handle it correctly and legally. Can you point me in the right direction?

Financial Planning

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score 0 · Answer 1

You do need an EIN and depending on the state you live in you may need a state number as well in order to pay state unemployment tax. I live in Texas and I pay the state tax quarterly and the federal taxes annually when I file my own tax return. The IRS has a handbook for household employers and I would suggest that you read it from cover to cover. It explains about the state unemployment tax and gives you the contact information for each state in order to set up an account for unemployment tax.

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score 0 · Answer 2

Also my accountant advised that I put the tax liability in my father's name and not the Trust. It seems to have been good advice.

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score 0 · Answer 3

I've used Elder/Nanny Chex for payroll and they take care of everything,
elderchex

I also got Workmans Comp coverage through my dad's homeowners insurance for about $120 a year.

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score 1 · Answer 4

Pam is right about the EIN. I was incorrect. You can apply online here and will get the EIN number immediately after completing the online form.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-%28EIN%29-Online

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score 1 · Answer 5

Yes you need an EIN number, which is a fairly simple online process at irs.gov You then submit the withholding quarterly on irs forms. I would NOT list the trust on the EIN application, just her. It might be a good idea to get a payroll service and avoid headaches down the road. Ask her accountant if she has one.

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score 0 · Answer 6

It doesn't matter that the money is in a living trust. I don't believe you need anEIN. I think most of your answers are here: http://www.irs.gov/taxtopics/tc756.html

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Do you need an EIN to hire someone personally as a caregiver?

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