Never been a Better Time to Put Your Household Employees on Books
The American Rescue Plan Act of 2021 was passed on March 11, 2021 and offers much-needed financial relief to employers and employees alike. This $1.9 billion bill is intended to address the financial impact of COVID-19 by offering unemployment benefits, expanding tax credits, and answering some outstanding tax questions from relief bills passed in the year since the pandemic began. Here, we look at sections of this bill that are likely to affect household employers and caregivers and domestic workers who keep so many households operating smoothly.
If Covid-19 taught us one thing, it’s about being prepared and making sure your household employees are cared for when a disaster strikes. Many household employers do not have their employees on the books. So, when families were forced to lay off those workers, the employees could not claim unemployment benefits. To make matters worse, when those workers attempted to claim unemployment, the state and the federal government were notified the employer did not pay taxes. Bad news.
Now for the good news. There has never been a better time to do the right thing. Introducing the America Rescue Plan Act. As stated above, the Plan allows families additional tax credits, making it easier for household employers to pay all Social Security and Medicare taxes while saving money.