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Nanny Tax Basics

  • Are you a household employer?

    What Your Family Needs to Know... At HWS, we are experts on the tax and labor laws surrounding household employment so you don't have to be. Let's first determine whether YOU are a household employer. Our knowledge center goes into much more depth on the details, here it is short and simple. Our lives are busy, and we... Read more »
  • I have a domestic (nanny, elder care giver, housekeeper) working in my home. What taxes do I need to pay?

    In general, the Internal Revenue Service requires payroll tax filings by a domestic employer (household employer) who pays a household employee more than $2000 cash wages (2016) in a calendar year. These nanny payroll taxes are collectively referred to as “nanny taxes”, although as a practical matter these employment taxes are applied to all US… Read more »

  • What payroll taxes does my nanny (housekeeper, maid) pay?

    Nanny payroll taxes, what are they?  First it is important to understand the so called "nanny taxes" apply to ALL household employees, not just nannies. Your household employee (nanny, housekeeper, senior caregiver, etc.) contributes to or pays: Social Security & Medicare Taxes (via payroll deduction) Employee Disability/Unemployment Taxes where required. Federal/State Income Taxes The employer... Read more »
  • How often do I need to pay or remit the “nanny taxes”?

    The federal and state filing schedules are NOT synchronized. Additionally, not all states have the same reporting schedule. Federal Employment Taxes: Employers of domestic workers must, at a minimum, make annual payments for Social Security, Medicare and Withheld Income Tax (if applicable), as well as Federal Unemployment Tax (FUTA). This filing is incorporated with the… Read more »

  • What is New Hire Reporting? I just hired a nanny.

    The Personal Responsibility and Work Opportunity Act of 1996 requires that all employers to report information on all newly hired workers within a specified period, generally 2 weeks, or incur a penalty. Each state has designated an agency responsible for the collection of data and enforcement of the requirement. This reporting expedites enforcement of child… Read more »

  • Nanny Fired: When are last wage payments due?

    Whether the nanny is fired (involuntary separation, termination or discharge) or resigns (quits) voluntarily, state rules define how quickly the employer must make final wage payments. Below is a state by state summary of separation payment rules as they apply to nannies.* February 2009 You MAY NOT withhold the last paycheck pending the return of… Read more »

  • Are there tax breaks for dependent care? Does this apply when I hire an in-home caregiver?

    There are two popular strategies that families employing nannies or senior caregivers use to minimize their personal income taxes. Many families can utilize a flexible spending plan (cafeteria plan) offered by their employer for child and dependent care expenses. Your employer’s human resources department can provide you with plan details. Another strategy is the Child… Read more »

  • Congress simplified the “nanny taxes.” What does that mean to me?

    Congress legislated significant revisions to the “Nanny Tax” in October 1994. The remittance of the FEDERAL nanny payroll taxes was incorporated in the employing families’ annual Form 1040 filings. Most payments to household workers under 18 years of age are now exempted. The wage payment that triggers an obligation to make “Nanny Tax” filings was… Read more »

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