Questions on form 4852 and 8919 for working as a household employee out of state without W2
Can add the nanny income as Common Income→Wage(W-2)→non-standard W2 but do I need to add 2 states info (one for home (NJ), and the other for working (CA)) for state taxes reporting/calculations.
Plus after adding Income→Other Income→Wages not on a W-2 (Form 8919) to report
uncollected Social Security and Medicare taxes, the nanny income is double counted as shown on form 1040 line 1a and 1g (wages from Form 8919).
What should I do to correct that?
The HACK I'm thinking is add the non-standard W-2 federal income to be $1 but input correct income for states. Hopefully, this triggers the correct state taxes calculation.
The corrected nanny income will be reported on Other Income→Wages not on a W-2 to trigger generation of Form 8919 with the social security and Medicare taxes calculated correctly and have Form 1040→Income line 1g populated.
Please advise and thanks!
Hope I can use below to get CA taxes credit to NJ
PS: will Freetaxusa software knows automatically calculate correctly and generate 2 states returns. Thanks
Answers
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Hello THL! Regarding the double-counting issue, this is the core problem to fix first. You should use either the non-standard W-2 entry or Form 8919, but not both for the same income. Since you did not receive a W-2 and your employer did not withhold Social Security and Medicare taxes, Form 8919 is the correct way to report this income. The non-standard W-2 entry should be removed entirely. When you enter your wages on Form 8919, that amount flows to Form 1040 line 1g, which is exactly where it belongs. The "hack" of entering $1 on the W-2 is not recommended because it would misrepresent your income and could cause issues with your return.
To remove the non-standard W-2 entry, go to Income, then W-2 (Wages), and delete that entry. Your nanny income should only be entered through Income, then Other Income, then Wages not on a W-2 (Form 8919).
Regarding state taxes, since Form 8919 does not have state wage boxes like a W-2 does, the state income allocation works differently. When you go through your NJ and CA state returns, the software will generally pull your total wages and ask you to allocate or confirm what portion was earned in each state. You will want to enter the CA wages as the amount earned while working in California, and NJ will typically tax you as a full-year resident on all income. You are correct that you can claim a credit on your NJ return for taxes paid to CA, and the community article you referenced is a good guide for that step.0 -
Great. And i also did some research. For grandparent as a caretaker, it doesn't need to pay Medicare and Social Security taxes. If this is the case, I don't need form 8919 and just report the income in non-standard W-2 entry (from 4852).
Can you confirm that? Thanks!
Ref:
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Thanks @JanaA !
Additional reference:
Employers generally don't withhold or pay FICA taxes on wages they pay to their spouse, a child under age 21, a parent or an employee under age 18 unless performing household work is their principal occupation. But, they need to report the compensation on a Form W-2, Wage and Tax Statement.
The question is where to report that using FreeTaxUSA on that income. Any advice as there's no Form W-2?
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@JanaA, If using Form 8919, can I e-file the return?
Just found that using non-standard W-2 entry denies me to e-File the return.
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Hello THL,
As JanaA shared, when you do not have a W2 but the wages should have been reported on one, it can be entered under:
Income > Other Income, scroll down to: Wages not on a W-2 (Form 8919) where it asks, "Did you receive any compensation from your employer that should have been included as wages on a W-2?" Select Yes, and the following screens will walk you through this entry.
The links you provided, referenced specific examples of when income is reported on line 8j of Schedule 1, Activity not engaged in for profit income, or Hobby Income. Please reach out to our Support Team inside your account to discuss your specific situation and how to report this income.0
