Every spring we receive inquiries from nannies who didn’t get a W-2 from their employer. This is almost always when the nanny is no longer employed by the family. The following are some tips and steps to take.
- Form W-2 is due January 31. The IRS specifically asks that you allow the employer until February 15 before you report it missing. The January 31 date is the ‘mail by’ date.
- It is February 15 and you still do not have a W-2. First step is to phone the employer. Often the nanny has moved and the employer does not have a valid mailing address. Allow two additional weeks if you needed to update your address for the employer to obtain/generate a replacement.
- The employer does not intend to give you a W-2 or intends to provide a 1099. The next step is to remind the employer that as a nanny you are entitled to a Form W-2. The employer is responsible to remit the Social Security and Medicare taxes, as well as pay unemployment insurance. The employer is NOT responsible for the nanny’s income taxes unless it was agreed to in the written work agreement (rather rare). The IRS Publication 926 is a point of reference to reinforce this.
- Phone Support from the IRS. The IRS encourages employees in this situation to phone 1-800-829-1040 for guidance. In our experience, you will be told the same information as what is contained here, and wait on hold a VERY long time to get this information!
- The employer still refuses to provide the W-2 Form. Please see the two scenarios below.
Nanny W-2 not received. Nanny has received NO tax forms from employer:
The nanny is still responsible for reporting her nanny wages and filing an income tax return even if she did not receive a form W-2. This is accomplished by completing Form 4852 Substitute Form W-2.
Tip! Be very sure that 7(A)(a) is the sum of the gross wages plus the values for Social Security and Medicare Taxes due from the employer. For example: Nanny is paid $2000 per month for 8 months. 7(a) is $17224.00 ($16000 + $1224) The Social Security and Medicare is 7.65% of the gross wages. 7(b) and 7(c) are $16000.
Nannies who use the Form 4852 will need to provide the family’s name (both John and Mary Smith), their address and phone number (phone is not required but very helpful). If the nanny has received a Form W-2 from this family in the past, the nanny should report the EIN from the prior form. If not, enter Unavailable or Unknown.
The answer to line 9 of Form 4852 is that 7(a) is the sum of cash wages and employee Social Security and Medicare paid by employer. 77(b) and 7(c) are cash wages alone.
The answer to line 10 is a brief statement – something to the effect “I worked as a nanny from x date to y date. I was paid at RATE. I phoned the family and requested the Form W-2 and they refused to provide.” or a similar BRIEF narrative. It is important that you state you were a nanny or household employee.
The IRS requests that you wait until April 15 to file your return, in the hopes that the family will come around and provide you the correct documentation. The nanny cannot eFile when using a substitute Form W-2. The conventional paper tax return is mailed to the appropriate address. When the nanny is forced to use the substitute Form W-2 it is MUCH harder on the employer to get the mess straightened out. The nanny is pretty much done at that point. It is in the employer’s best interest to resolve the problem before it gets that far.
Nanny incorrectly given Form 1099 MISC:
We are presuming at this point you have already gone through the steps outlined above and your employer will not change their mind. You will want to use Form 8919 Uncollected Social Security and Medicare Taxes on Wages. Line 1 of this form requires information about your employer that you can pull directly from the Form 1099MISC they gave you. Your Reason Code is G, and you will need to submit a Form SS-8 Determination of Worker Status (see sample) on or before the date you file your income tax return.
IMPORTANT! Line 1 (f) instructions: Must be the sum of cash wages and employee Social Security and Medicare paid by employer. (IF Cash Wages = $10,000, calculate as Cash Wage plus [Cash Wage * 7.65%], with Gross Wages of $10,765.00). Repeat this on lines 6. STOP THERE! Mark boldly through lines 9 – 13 “SEE ATTACHED STATEMENT”.
Write an ATTACHMENT TO IRS FORM 8919 that explains that you were employed full time from date to date by Employer’s Name as a nanny for their # children, Child Name, Child Name and Child Name. You worked in their private home. You were paid Cash Wages of $$$ NET of Social Security taxes (the CASH wage from your calculation above). At the end of the year the employer failed to provide you a Form W-2 as required by the Internal Revenue Code (please see Publication 926). Per IRS instructions, your employers are responsible for the payment of your Social Security and Medicare taxes, and you are responsible for the payment of your income taxes, which you do with Form 1040.
If you do not provide this written explanation, you may be deemed liable (initially) by the IRS for half of the Social Security and Medicare taxes. You will become an IRS pen pal as you battle to get this corrected! It is important that you always state you were a nanny or household employee working in the family’s private home.
You must use the line 1(f) amount when you report your income. This is because you owe a small amount of income taxes on the Social Security and Medicare taxes that were the employee’s (your) share paid on your behalf by the employer (family).
When a Form 4852 or Form 8919 are filed by the former nanny or household employee, the employer will be questioned by the IRS and the IRS will assume responsibility for collection of employment taxes. Nanny always remains responsible for her income taxes, federal and state if applicable.
» Frequently Asked Questions About the Nanny Tax
» IRS Form 4852
» Is My Nanny an Independent Contractor?
» Nanny Given a 1099 Fights Back
» US Department of Labor: Employee or Independent Contractor?