Most nanny employers have heard about the “nanny tax” from friends and colleagues who’ve hired a nanny. Unfortunately the information is usually vague and doesn’t give employers any real help in understanding or dealing with their nanny taxes. Check out these sites for the information you need to get through the maze of nanny taxes.
What Is The Nanny Tax?
So what exactly is the nanny tax? It’s important to understand your responsibilities as a nanny employer and have a clear picture of the taxes you are required to pay by law.
- Paying A Nanny/Babysitter on the Books by Park Slope Parents
- Nanny Taxes: Understanding FICA by 4nannytaxes.com blog
- What Do Nanny Taxes Cover? by GTM Payroll Services blog
- The “Nanny Tax” Obligations by Breedlove and Associates blog
- Nanny Taxes: The Breakdown by Nannies4Hire blog
Do You Owe Nanny Taxes?
Not all parents that employ a nanny have to pay the nanny tax. There are limitations that exclude some caregivers. Knowing the limitations before you hire your nanny will help you start off on the right foot from day one.
- Household Employee Wage Threshold Rises to $1800 by First Class Care
- The Nanny Tax: Paying Babysitters and Other Household Employers by H & R Block
- Nanny Payroll Part 1: Do I Owe the Nanny Tax? by Sure Payroll
- Nanny Taxes by M Bess Cane, CPA
- Navigating Nanny Taxes by Sittercity
Misclassification of Workers
Is your nanny an employee or an independent contractor? This is one of the most common questions nanny employers have. The IRS is stepping up enforcement on misclassification of workers so it’s essential you’re clear about what role your nanny fills.
- Avoiding Mistakes in the Nanny Hiring Process by Regarding Nannies
- States Cracking Down on Fraudulent Employment Practices, Including Employee Misclassification by Family Helpers
- Can I Treat My Nanny as an Independent Contractor? by My Nanny Contract
- Legal and Tax Tips for Hiring a Nanny by Rocket Lawyer
- Household Employment 101: How to Employ Your Nanny Legally by Divine Caroline
Understanding Nanny Rights
All nannies have certain rights under the Fair Labor Standards Act, which is a federal law. Many nannies have additional rights under state laws. Take the time to understand what your nanny is entitled to so that you ensure you’re offering a legal wage and work environment.
- The Nanny Bill of Rights by Care.com
- The Nanny State: Your Babysitter’s Rights to Minimum Wage, Overtime, and Paid Vacation by Hollywood LAist
- Nannies’ Rights by Nannies Incorporated
- Nanny State: Helping Define Rights for the Hired Help by Care2
- Eleven Nanny and Domestic Worker Rights by Be The Best Nanny Newsletter
The Paperwork Nanny Employers Need to Complete
No one likes doing paperwork, especially the tax kind. Unfortunately nanny employers have a fair amount of paperwork to keep up with when it comes to filing their nanny taxes properly. Remember there are forms that need to be filed with the federal government, your state, and possibly your local government too.
- The Nanny Tax: How to Pay Nannies, Babysitters, and Home Help by Equifax Finance Blog
- How To Pay the Nanny Tax – Easy Instructions for Forms W-2 and W-3 by About.com
- Your Responsibilities When Employing Household Help by David B Robinson, CPA
- How To Create a W-2 For Your Nanny by Nanny Tax Tools
- Don’t Ignore the Nanny Tax by Brinton Eaton
The Dangers of Not Paying the Nanny Tax
Thinking it’s all too complicated for you to bother with? There are many dangers that come with not paying your nanny taxes. With the recent rise in Domestic Workers Rights bills being introduced in several states, there’s more scrutiny on nanny employers by caregivers and government agencies.
- The Importance of Paying Household Taxes by Mom’s Best Friend
- Nanny Tax: Not What Fran Drescher Had in Mind by Ryan Ellis LLC
- Avoiding Tax & Legal Landmines by INA
- Pay Your Nanny on the Company’s Dime and Risk Jail Time by Intuit Small Business Blog
- Nanny Tax Evasion Grows Bigger and Bigger by Tax.com
Nanny taxes can be a hassle, but they’re a necessary part of being a nanny employer. Paying your taxes will not only help your nanny be more financially secure, it will keep you out of hot water with the IRS.
Payroll was pretty much the bane of my existence when I first hired my nanny. I wish this post had existed back then! This is all solid info though – definitely will be helpful to all families who are newly navigating these waters.
thanks for sharing all of this info – nanny payroll and all the legalese is so confusing and this gives me a better understanding of what i need to be doing for my nanny!
I handed everything regarding our nanny taxes over to Breedlove and they have been an absolute Godsend – I would be lost without them. True professionals in the business, and a pleasure to work with to boot!
Agreed! We love Breedlove!
we made the mistake of not researching nanny payroll ahead of time and added our nanny to our company’s payroll (we are self-employed)… what a headache that was! fun fact: you can’t do that. needless to say, after lots of ironing things out with our lawyer, we finally got everything figured out.
Hello! Thanks for sharing this information. It would be a great help. For fillable W2 forms or any tax form you need visit this website(http://goo.gl/Bsbe7W); they also have 306form (http://goo.gl/VoGOrv) you might want to check it out. You can download, edit, print, save, sign, email or even fax your tax form online.