Part of being a household employer means making tax payments to the IRS and the state on a regular basis. And by being a HomePay client, it’s something we handle on your behalf so you don’t have to worry about ever missing a deadline. But we also understand that you may have questions about the process or how we’re taking care of things. Below are a few common questions we get from clients like yourself that we hope will help clear up any uncertainty you have about the tax collection process.
Why am I paying my employee’s taxes instead of them handling it on their own?
The IRS requires you to withhold taxes from your employee each pay period, but the amount of taxes withheld from your employee’s paycheck stays in your bank account. When a tax payment is due, we collect these taxes, along with the employer taxes you owe. We then send the full tax payment to the appropriate tax agency.
Why do I owe taxes again, didn’t I recently pay them?
Unlike your personal income tax return, household employment taxes are due to the IRS and the state multiple times throughout the year. We email you in advance of any taxes we’ll debit from you, but you can also refer to this tax collection schedule for a full calendar view of when taxes are due this year.
Do you impound taxes?
No, this is not an option we currently offer. Since we don’t impound, your bank account will earn interest on your money while your tax liability accrues, up until we debit the taxes due to the IRS and state.
How can I budget to make sure I’m prepared for upcoming tax collections?
Your HomePay account has a running total of the taxes you’ve accrued so you can view it at any time. Once you log in, you can navigate to the Tax Forms tab of your online portal and see your tax liability to-date. A list of the taxable wages and tax rates can be found by selecting the Federal Details or State Details sub-tabs.
What do the acronyms SUI , SIT and PFL stand for?
SUI stands for State Unemployment Insurance, which is an employer tax that you pay to fund the unemployment pool in your state. SIT stands for State Income Tax, which is a tax withheld from your employee each pay period. PFL stands for Paid Family Leave, which only exists in a limited number of states, and depending on the state, is either an employee or employer tax.
If you still have questions, please contact our office at 888-273-3356 during normal business hours. We’re happy to discuss your latest tax collection, existing tax liability or any other inquiry you may have.
