3-003.01 Social Security Tax Withholding Introduction

In some situations, NDSS withholds Social Security taxes (Federal Insurance Contribution Act, FICA) from provider payments. Individual in-home service providers (e.g., in-home day care and homemaker) who are not self-employed are considered employees of the client for whom they provide service. NDSS, 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.