FS#3: Payroll Responsibilities for Family Members as Employees

Please scroll down on this page to find a chart which summarizes the payroll tax and insurance coverage obligations of day care providers who hire family members as employees.

A large X symbol means you are responsible for making sure the following payroll tax or insurance coverage is paid on behalf of your employee.

If the employee is:	Federal, state and city Income taxes	FICA taxes (1)	Federal unemployment taxes	State unemployment taxes	Workers’ Compensation	Disability Benefits Insurance
Non-family member	X	X	X	X	X	X
Spouse of sole propietor	X	X			X (2)	X(3)
Parent of sole propietor	X	X		X	X	X
Child of sole propietor (21 and over)	X	X	X	X	X	X
Child of sole propietor (18-21)	X	X			X	X
Child of sole propietor (under 18)	X				X
Independent Contractor

1. FICA refers to Social Security and Medicare taxes.

2. Exception: If a provider runs the business together with her spouse, then the spouse is not covered by workers’ compensation.

3. Disability Benefits Insurance is generally required, unless the provider completes a special form, DB-212.5, to exclude her spouse from coverage. For more information, or if you cannot obtain the form from the Internet, please call the NYS Workers’ Compensation Board at (877) 632-4996.

If you have any questions about payroll responsibilities, call our Child Care Project hotline at 718-237-5540.

This article was posted March 03, 2010