Household Employer Rules - Do I need to W2?

[Babak Jamali]

Hello all,

I'm trying to figure out if as a homeowner (not a business/self-employed) I would have to 1099 or W2 someone who helps me rehab my primary residence. That someone would not be a contractor or family member, but unskilled labor from the neighborhood to help when I need an extra pair of hands for heavy objects, or mindless labor like yard work.

Per IRS, "If you made a payment during the calendar year as a small business or self-employed (individual), you are most likely required to file an information return [1099] to the IRS." This seems straightforward that as a homeowner I don't have to 1099 regardless of who's working on my primary residence. Question: does this still hold true if it's cash payments?

However, I'm concerned about the Household Employer rules in IRS Publication 926. It pretty much states that I have to W2 as soon as I direct, supply tools, or control the hours of anyone working on my primary residence (seems very excessive). Are there any exceptions you're aware of, or scenarios this wouldn't apply? If not, are there any good guides out there on how to W2 as household employer and what minimum benefits I would have to provide?

Thanks,
Babak