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Nanny Mileage Reimbursement Rates & Fringe Benefits

Nanny Mileage Reimbursement Rate

Nanny Mileage ReimbursementMost families refer to the IRS guidelines to calculate the nanny mileage reimbursement rate for the business use of her personal vehicle. This will include such things as transporting your child(ren) to/from school or activities, errands, shopping, etc. It does not include the nanny’s commuting mileage to/from her home to her place of employment. Nanny mileage reimbursement is tax free except for values that exceed the IRS rates.

Mileage Pad makes a free app available to help employees accurately track business mileage for employer reimbursement.

Period

Reimbursement Rates

Jan 1, 2016 – 54 cents a mile
Jan 1, 2015 – Dec 31, 2015 57.5 cents a mile
Jan 1, 2014 – Dec 31, 2014 56 cents a mile
Jan 1 – Dec 31, 2013 56.5 cents a mile
July 1, 2011 – Dec 31, 2012 55.5 cents a mile
Jan 1 – June 30, 2011 51 cents a mile
Jan 1 – Dec 31 2010 50 cents a mile
Jan 1 – Dec. 31, 2009 55 cents a mile
July 1 – Dec. 31, 2008 58.5 cents a mile
Jan. 1 – June 30 2008 50.5 cents a mile
Jan. 1 – Dec. 31, 2007 48.5 cents a mile
Jan. 1 – Dec. 31, 2006 44.5 cents a mile
Sept. 1 – Dec. 31, 2005 48.5 cents a mile
Jan. 1 – Aug. 31, 2005 40.5 cents a mile

 

HomeWork Solutions, Inc., December 2015

The standard mileage rate is established by the IRS, and the nontaxable amount that is used by employers to reimburse employees for the business use of their personal automobiles. This is the reimbursement rate most families use to reimburse the nanny or housekeeper who uses her personal vehicle to perform her job. The rate typically adjusts once per year, with announcements made in November for the next year’s rate.



2016 Household Payroll Updates


Nanny Fringe Benefits

Insurance Benefits: The IRS will allow the employer to pay the cost of an medical or health insurance plan for employees, including an employee’s spouse and dependents. Depending on circumstances the premium payments can be excluded from wages and are not subject to social security, Medicare, and FUTA taxes, or federal income tax withholding.

  • If you only employ ONE household employee, you can reimburse on a tax free basis for policies purchased on the individual exchange.
  • If you employ TWO or more household employees, tax free reimbursement is only permitted if the insurance policy is purchased by the employer in the Small Business Health Insurance Exchange, or SHOP. Generally, this exclusion also applies to qualified long-term care insurance contracts. To qualify, this benefit must be offered to all similarly situated employees.

Some household employers may be eligible for a tax credit for employer paid health insurance premiums. HWS refers you to the official HealthCare.gov website for the most current guidance on this subject.

Social Security Wage Base: The Social Security wage base for 2016 is $118,500.  The maximum amount an employee can have withheld for Social Security tax in 2016 is $7347.  Employers must contribute of the employee’s gross pay 6.2% for Social Security taxes up to the wage base, and 1.45% for Medicare (which has no wage base).

Qualified Transportation Fringe Benefit: $130 per month for 2014 – 2016 for mass/public transit plans, and $255 for parking (2016).

See Related Article
INTERNAL REVENUE SERVICE: MORE INFORMATION

Educational Assistance: The annual tax free amount for employer-provided educational assistance is $5,250 for 2014 and applies to undergraduate and graduate-level course work. According to the IRS, “Employers offering tax-free educational assistance are required to have a written plan describing the benefit and the terms under which it is available.” (Notice 97-60 Exclusion For Employer-Provided Educational Assistance). Translation: put it in writing in your written work agreement. Non-discrimination tests apply. An employer may pay for any form of instruction or training that improves or develops an individual’s capabilities, whether or not job-related or part of a degree program under a qualified education assistance program without defeating the non-taxable status of the benefit supplied to the employee. MORE INFORMATION

» Internal Revenue Service Publication 15B: Employer’s Tax Guide to Fringe Benefits

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