CLIENT LOGIN | Member Services OR EMPLOYEE LOGIN | Self Service

Menu

1-800-NANITAX (800-626-4829) Enroll Now Log In

Knowledge Center

How are the nanny’s (employee’s) payroll taxes paid?

Nanny payroll taxes – most household employers have BOTH Federal and State tax reporting and filing obligations.

Household Employers Nanny Tax Checklist

Federal Employment Taxes

The Federal employment taxes include Social Security tax, Medicare tax, withheld Federal Income Tax (if applicable), and the Federal Unemployment Tax (FUTA).

The household employer is required to collect the employee’s (nanny, housekeeper, etc.) contribution to Social Security and Medicare taxes. Should you fail to collect, you remain responsible to remit these taxes for the employee. The Internal Revenue Service (IRS) collects the nanny taxes. They are summarized annually on the family (employer’s) Form 1040 Schedule H – an attachment to the family’s personal federal income tax return.

The nanny payroll taxes are added to the family’s personal income tax liability. Most families with full time staff will make quarterly payments of the nanny payroll taxes using 1040ES estimated tax payment coupons. This protects the family from substantial underpayment penalties at year end should the total family income tax + nanny payroll tax liability be too large.

Deducting federal income taxes and most state income taxes is optional. When income taxes are not withheld by the employer (family), then the employee (nanny, housekeeper, maid) is required to make periodic payments of any amounts due.

Most household employers with a full time staff member offer to deduct income taxes for the employee from his/her payroll. This is a convenience to the nanny or other household staff, relieving them from the need to make quarterly estimated tax payments on their own. Utilizing a household payroll service makes these tax calculations, deductions and payments effortless for hiring families. Families with occasional or part time staff, such as a weekly housekeeper, in general do not deduct income taxes from the employee’s payroll.

State Employment Taxes

Separately, the nanny employer is typically required to register for and make quarterly payments of state unemployment taxes. These unemployment taxes are paid to the state where the work is physically performed. Many states are moving to require online payroll reporting and unemployment tax payments.

Household Payroll Tax Compliance Checklist

 

» Calculate Nanny Payroll Taxes
» Nanny Tax Compliance: Why a Nanny Wants to be Paid Legally

FREE Updates & Tools

FREE Updates & Tools

Sign up with HomeWork Solutions today for valuable resources only available to our subscribers.

  • Receive industry related news and updates though our blog.
  • Access our FREE payroll tax calculators.
  • Access special offers & downloads.

I understand that I am registering for access to HWS. I grant HWS permission to contact me via email regarding household payroll and tax services they offer.

All fields are required.