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Do the Nanny Tax rules ever change?

Yes. The 1995 Federal legislation, the “simplification” of the nanny tax rules, began a cascade of changes that continues today. Nanny tax rules alone are not the only regulations the household employer must follow. Numerous changes to federal and state labor laws specifically impact household employers.

  • Federal Employer Identification Number required for all household employers. Reporting may no longer be done with the employer’s SSN. (1997)
  • All household employers are required to submit Form W-3 to the Social Security Administration. (1997)
  • Federal household employment taxes are subject to underpayment penalties if not paid in periodically by the employer, either by submitting quarterly payments or adjusting withholding on the employer’s paycheck. (1998)
  • New hire reporting is now mandatory nationwide, as a result of welfare reforms in the Clinton era. (1999)
  • The protracted recession of 2008 – 2011 caused employers in many states to a temporarily elevated FUTA rate until the states repay loans from the Federal government to fund unemployment benefits. (2010 – 2017)
  • The US Department of Labor has issued revised rules that change the household employers obligations for minimum wage and overtime in regards to privately employed homecare (senior care giver) workers. (2015)
  • New York, California and the District of Columbia require that household employees be provided hourly pay rate notices. Other states are considering similar legislation. (2011 – present)
  • Domestic worker bill of rights legislation has been enacted is several states including California, Hawaii, Illinois, Massachusetts, New York and Oregon, with more on the horizon.
  • Pay stub requirements began making their way through state legislatures under the umbrella of Wage Theft Prevention in 2012. More than 30 states now require pay stub documentation.

There have been 14 different changes to the wage threshold that triggers a nanny tax, or an employment tax obligation for employers of domestic service workers. HomeWork Solutions’ professionals keep current with these changes and notify clients accordingly.