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REV. AUGUST 20, 2007 NEBRASKA DEPARTMENT OF CCS PROGRAM MANUAL LETTER # 69-2007 HEALTH AND HUMAN SERVICES 392 NAC 5-001.03A

5-001.03A Introduction: In some situations, the Department withholds Social Security taxes (Federal Insurance Contribution Act, FICA) from provider payments. Individual in-home service providers (e.g., in-home child care and homemaker) who are not self- employed are considered employees of the client for whom they provide service. The Department, upon receiving a signed Form IRS-2678, “Employer Appointment of Agent,” acts on behalf of these clients to withhold mandatory FICA taxes and pay the client’s matching tax share to the IRS.

Note: The Department does not withhold federal or state income tax or federal unemployment insurance tax from any provider payment. 5-001.03B Definitions: Affected Clients/In-Home Services: The employee’s share of Social Security tax is withheld from provider payments only when in-home child care is provided.

Affected Providers: In-home providers authorized to provide in-home service who are not affiliated with an agency and are not self-employed are subject to FICA withholding. Earnings Taxed for Social Security: Affected providers are subject to Social Security tax payment for each calendar year in which they are paid a specified amount for services provided to one client. The earnings limit is adjusted annually. The Department withholds this tax from all payments to affected providers. Self-Employed Providers: Individuals who file Social Security taxes on their own behalf are considered self-employed. They are identified by an FID number rather than a Social Security number. Social Security Tax Rates: The Department remits to the IRS an amount equal to the current Social Security tax rate for specified “in-home” services. Half of this amount is withheld from the provider as the employee’s share; the other half is provided by the Department on behalf of the client employer. 5-001.04 Provider Release of Information and Statement of Criminal History: Individual providers must sign a release of information and statement, identifying any felony or misdemeanor convictions and/or pending criminal charges. This statement must include details, dates, and disposition (e.g., parole, probation, incarceration, fine, community service, etc). The provider must include minor traffic violations only if the provider will provide transportation services. If the provider will be providing services in his/her home, the provider must also provide this information for all household members age 19 or older.