A2279 1R

[First Reprint]

ASSEMBLY, No. 2279

STATE OF NEW JERSEY

INTRODUCED SEPTEMBER 19, 1996

By Assemblymen WEINGARTEN, ROBERTS and Gregg

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. ¹Notwithstanding the provisions of subsection a. of this section, an employer subject to the provisions of this section shall, within 10 days of the separation from employment of an employee in domestic service whose contributions are treated as taxes pursuant to the provisions of section 2 of P.L. , c. (C. ) (now pending before the Legislature as this bill), report to the director, on a form determined by the director in consultation with the Commissioner of the Department of Labor, wage information for all completed calendar quarters of employment not previously reported and such other separation information as may be required to properly process an unemployment compensation claim.

(e)¹ 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. ¹Notwithstanding the provisions of subsection a. of this section, an employer subject to the provisions of this section shall, within 10 days of the separation from employment of an employee in domestic service whose contributions are treated as taxes pursuant to the provisions of this section, report to the Director of the Division of Taxation, on a form determined by the director in consultation with the commissioner, wage information for all completed calendar quarters of employment not previously reported and such other separation information as may be required to properly process an unemployment compensation claim.

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

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