Occasionally, you may pay workers to do work that does not promote or advance your business. For example, during a slow business period you may pay an employee to do some work around your home. Or, you may pay one of your computer technicians to set up your personal home computer. In any event, special rules apply to the amounts you pay your employees for such "casual" labor. Unless certain dollar thresholds are met, your payments to those employees will not constitute taxable wages for payroll tax purposes. Furthermore, in no event will noncash payments for casual labor be taxable. On the other hand, you can't deduct your payments for personal services as a business expense.

Income and unemployment taxes. You're not required to withhold federal and most state income taxes or to pay federal (FUTA) and state unemployment taxes with respect to your cash payments to an employee for casual labor unless

• the cash payment is $50 or more in a calendar quarter, and
• the employee was engaged in casual labor for some portion of 24 different days during that quarter or during the preceding calendar quarter.

FICA taxes. You're not required to withhold or pay FICA taxes with respect to your cash payments to an employee for casual labor unless the payments amount to $100 or more during the calendar year.