ASSEMBLY, No. 2279

STATE OF NEW JERSEY

INTRODUCED SEPTEMBER 19, 1996

By Assemblyman WEINGARTEN

An Act providing for the simplification of wage taxes and withholding for household workers, supplementing chapter 9 of Title 54A of the New Jersey Statutes and Chapter 21 of Title 43 of the Revised Statutes.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. a. Notwithstanding the provisions of subsection (a) of N.J.S.54A:7-4 to the contrary, except for an employer also liable for withholding taxes with respect to remuneration for services rendered other than for domestic service, returns with respect to domestic service shall be filed on a calendar year basis. Such a return shall be filed on or before the date for filing the employer’s gross income tax return for the employer’s taxable year that begins in that calendar year pursuant to N.J.S.54A:8-1, and the amount of tax withheld shall be paid over to the Director of the Division of Taxation at that time, together with those contributions treated as taxes pursuant to the provisions of section 2 of P.L. , c. (C. ) (now pending before the Legislature as this bill).

    b. For the purposes of N.J.S.54A:8-5, for taxable years beginning on or after January 1, 1997, the taxes payable pursuant to subsection a. of this section and those contributions treated as taxes pursuant to the provisions of section 2 of P.L. , c. (C. ) (now pending before the Legislature as this bill) shall be treated as taxes imposed on the employer for the taxable year of the employer that begins in a calendar year referred to in subsection a. of this section; provided however, that this subsection shall not apply to an employer for a calendar year referred to in subsection a. of this section if no amount of credit for wage withholding is allowed pursuant to N.J.S.54A:7-3 to the employer for the taxable year of the employer that begins in that calendar year and the taxpayer had, but for this section, no tax liability for the preceding taxable year or no more than $100 liability for the current taxable year.

    c. The director shall prescribe such regulations as the director deems necessary to carry out the purpose of allowing employers to convert from a quarterly system of payments and filing to annual filing, and to simplify employer filing by allowing the combination of unemployment compensation, disability benefits and gross income tax for reporting and payment purposes for employees providing domestic services by treating the taxes payable pursuant to subsection a. of this section and those contributions treated as taxes pursuant to the provisions of section 2 of P.L. , c. (C. ) (now pending before the Legislature as this bill) as taxes imposed on the employer. These regulations shall include:

    (1) Provisions for the forwarding of contributions treated as taxes pursuant to the provisions of subsection b. of section 2 of P.L. , c. (C. ) (now pending before the Legislature as this bill), together with such information as may be necessary, to the Office of the Assistant Commissioner for Finance and Controller of the Department of Labor for deposit in the proper funds and accounts established pursuant to the “unemployment compensation law,” R.S.43:21-1 et seq., and the “Temporary Disability Benefits Law,” P.L.1948, c.110 (C.43:21-25 et seq.);

    (2) Provisions for the apportionment of interest and penalties imposed between liabilities pursuant to the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq. and those contributions treated as liabilities pursuant to the “New Jersey Gross Income Tax Act” pursuant to the provisions of subsection b. of section 2 of P.L. , c. (C. ) (now pending before the Legislature as this bill), and forwarding the latter to the Office of the Assistant Commissioner for Finance and Controller of the Department of Labor for deposit in the proper funds established pursuant to the “unemployment compensation law,” R.S.43:21-1 et seq., and the “Temporary Disability Benefits Law,” P.L.1948, c.110 (C.43:21-25 et seq.).

    d. For the purposes of this section, “domestic service” means domestic service as an employee in a private home of the employer, such as service as a babysitter, nanny, health aide, private nurse, maid, caretaker, yard worker or similar domestic employee. 

    2. a. Notwithstanding the provisions of subsection (a) of R.S.43:21-14 and subparagraph (E) of paragraph (1) of subsection (d) of R.S.45:21-7 to the contrary, except for an employer also liable for making or withholding contributions with respect to remuneration for services rendered other than for domestic service, returns with respect to domestic service shall be filed on a calendar year basis. Such a return shall be filed on or before the 15th day of the fourth month following the close of the employer’s taxable year for federal income tax purposes, and the amount of contributions shall be paid over to the Director of the Division of Taxation in the Department of the Treasury at that time.

    b. Notwithstanding the provisions of R.S.43:21-16 or any other law to the contrary, the contributions due pursuant to subsection a. of this section shall be treated as taxes due pursuant to N.J.S.54A:1-1 et seq., subject to the provisions of section 1 of P.L. , c. (C. ) (now pending before the Legislature as this bill).

    c. The Commissioner of the Department of Labor, in consultation with Director of the Division of Taxation in the Department of the Treasury, shall prescribe such regulations as the commissioner deems necessary to carry out the purpose of allowing employers to convert from a quarterly system of payments and filing to annual filing, and to simplify employer filing by allowing the combination of unemployment compensation, disability benefits and gross income tax for reporting and payment purposes for employees providing domestic services.

    d. For the purposes of this section, “domestic service” means domestic service as an employee in a private home of the employer, such as service as a babysitter, nanny, health aide, private nurse, maid, caretaker, yard worker or similar domestic employee.

    3. This act shall take effect immediately and apply to calendar years beginning after enactment.

STATEMENT

    This bill reduces the administrative burden on individuals who hire household workers by allowing those employers to eliminate 13 separate filings and 8 separate payments currently required for each calendar year and replaces them with one annual filing as part of the employer’s own gross income tax return.

    Currently, employers of household workers must make a quarterly report and payment of the gross income taxes they withhold from an employee’s pay, a quarterly report to the Department of Labor on the wages paid to their employee, and a quarterly report and payment of the unemployment contributions they withhold from their employee’s pay and the contributions the employer makes. In addition to these 12 quarterly reports and 8 quarterly payments, the employer must make an annual gross income tax reconciliation report for the employee’s gross income tax. The typical employer also satisfies his or her own gross income tax obligations through wage withholding or by making quarterly estimated payments and filing an annual New Jersey gross income tax return.

    This bill simplifies and streamlines the reporting and payment of taxes. The bill eliminates the separate 13 reports and 8 payments for employees, and instead requires individuals who employ only household workers to report the employee’s wage taxes and withholdings once annually, on the employer’s own New Jersey gross income tax return. The bill requires employers to satisfy the periodic payment of these tax obligations through additions to the employers’ own regular estimated tax payments or wage withholding.

Simplifies employer reporting and payment of gross income tax withholding and wage taxes for household workers.