0

I recently hired someone to work with me on personal tasks, such as listing some of my personal items for sale online. We both live in Connecticut. We work together in person in Connecticut for 1 hour per week, and I pay them $15/hour. We are both working as individuals (not businesses). What must I do (to abide by the law) when hiring a personal assistant in Connecticut? For example, must I withhold taxes or report anything to the government?

3

What follows is a broad overview. I'm not an expert in this; I just have a bit of experience in this due to a tax situation my wife & I experienced a few years ago. Please do not rely on this advice except as a starting point for more Googling.

Your obligations (and your assistant's) will depend on whether the assistant is an employee or an independent contractor. In general, an independent contractor is someone you hire to "get a job done"; you have minimal control over the manner, time, place, tools, etc., that the assistant uses. An employee, on the other hand, is someone you hire to come to work at a particular time and do the job a particular way. (I'm glossing over some details here; see the IRS link above for more details.)

If your assistant is an independent contractor, and you pay them over a certain threshold ($600 for 2020), you must provide them with Form 1099-MISC, and file a copy with the IRS as well. Your assistant will then be liable for income taxes on this amount, as well as self-employment tax (see below.)

If your assistant is actually an employee, and you pay them over a certain threshold ($600 for 2020), you are required to provide them with a W-2 form, as well as filing a copy with the IRS. In addition, if you pay them more than a higher threshold ($2200 in a tax year or $1000 in any quarter for 2020), you are responsible for withholding taxes from their paychecks, as well as paying the employer's portion of Social Security, Medicare, and/or federal unemployment taxes. How to figure these taxes is complex, but generally the employee must provide you with a completed W-4, and then you must provide them (and the IRS) with a W-2 at the end of the tax year. See Publication 15: Employer's Tax Guide for all the gory details.

The self-employment tax is designed to effectively cover the employer's portion of these taxes for self-employed workers. As you might imagine, employers are often tempted to misclassify employees as "independent contractors", since this means that this tax liability gets pushed from them onto their workers, as well as just making the employer's life easier. The Feds will not take kindly to such misclassification if it is discovered.

Finally, for the state of Connecticut, consult the CT 1009-MISC filing guide (if your assistant is an independent contractor) or the Connecticut employer's tax guide (if they are an employee). The distinction is pretty much the same as at the federal level.

|improve this answer|||||
  • Thank you for answering. So are you saying I don’t need to do anything (since they’re an employee and I pay them less than the threshold)? – ma11hew28 Jan 8 at 16:34
  • 1
    @ma11hew28: The $2200 threshold appears to be the threshold above which you are required to withhold taxes. It appears that there's a $600 threshold above which you are still required to provide them with a W-2, even if you did not withhold any taxes. See General Instructions for Forms W-2 and W-3, along with the Employer's Tax Guide, above. I've edited my answer to make this clearer. – Michael Seifert Jan 8 at 17:04
  • Critically, you must also get workers compensation insurance (and possibly unemployment insurance too) for an employee and must also pay local taxes such as head taxes that are present in a local municipality that apply. Also, you need a I-9 and W-9 from the employee at the outset if an employee. – ohwilleke Jan 8 at 19:23

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.