All About the Nanny Tax

Tips for understanding nanny taxes, nanny salary and tax withholding.

parent calculating nanny tax

Taxes. It's one of the big questions about hiring a nanny. How do you handle it? You may be tempted to forgo paying taxes and choose to pay cash, but frankly, with someone working for you as much as a nanny does, that's risky. You may eventually get flagged for a tax audit -- something you obviously want to avoid. If you pay your nanny -- or any household employee, for that matter -- more than $1,900 a year, then you need to report them when you file your taxes. But, it's not just about the amount your nanny makes; it's her employee status that really matters.

Is Your Nanny an Employee?
In short, yes. According to the IRS, a person is an employee if you have control over what they will do and how they will do it, as opposed to an independent contractor for whom you control only the result of their work. The behavioral and financial aspects of your nanny's job, as well as the type of relationship you have with her, are all included in the IRS's description of what defines an employee. Your nanny's status as an employee impacts your tax obligations.

Learn more about why your nanny is NOT an independent contractor »

What are Nanny Taxes?
So, take a deep breath -- here are the basics about nanny taxes from the IRS:

  • The "nanny tax" is comprised of (1) Social Security and (2) Medicare combined, referred to as FICA, and (3) federal unemployment tax, known as FUTA.
  • The FICA tax equals 15.3 percent of wages and is generally split between the employee and employer. You're not required to withhold the nanny's half, and most parents and nannies agree not to. This means the employer is responsible for the entire amount come tax time. However, if you and your nanny do choose to withhold, you're responsible for paying half of his or her taxes (the withheld income).
  • The FUTA tax is due on the first $7,000 of your nanny's wages for the year but only if you paid $1,000 or more for any calendar quarter for the current or preceding year, and the nanny is not your parent, spouse or a person under the age of 21.
  • You need to use a Schedule H (Household Employment Taxes) to calculate and report your nanny's wages to the IRS.
  • You need an employer ID number (EIN) in order to do your nanny tax reporting. Get one by filing a Form SS-4.
  • You must provide your nanny with a Form W-2.
  • You will need a Form W-3 when filing a copy of your nanny's W-2.
  • Get all tax forms directly from the IRS by calling 1-800-829-3676 or by visiting the IRS website.
  • If you need information on federal and state withholding, check out our article on W-4 Forms for Nannies and Caregivers »
  • Additional state-specific requirements exist for household employers and vary depending on your state of residence. Consult the tax section of your state government's website to look up the specific household employer rules where you live.

Confused already? Check out Care.com HomePay, managed by Breedlove, to learn about free nanny tax consultations.

What is Household Employment?
Even the basics can seem confusing, so be sure to check out the Household Employer's Tax Guide, known fondly as Publication 926. This guide takes you through the "all you needed to know but were afraid to ask" information you need about nanny taxes. It's well organized and includes helpful tips, explanations, and a Household Employer's Checklist.

Don't be intimidated by this document. It answers nine major nanny tax reporting questions and includes an index, list of other tax publications and forms and information about where to get tax help. The major questions reviewed are:

  • Do you have a household employee?
  • Can your employee legally work in the United States?
  • Do you need to pay employment taxes?
  • Do you need to withhold federal income tax?
  • What do you need to know about the Earned Income Credit?
  • How do you make tax payments?
  • What forms must you file?
  • What records must you keep?
  • Can you claim a credit for child and dependent care expenses?

What are the Benefits of Paying Employees or Your Nanny Legally?
Within the nanny industry, there's an underlying concern that many people don't understand the benefits of paying a nanny "above board." The prevailing idea is that proper nanny salary and tax reporting create financial hardship both for the employer and the nanny. And, with the work needed to set up the reporting properly, many people just decide to forget it and pay their nanny "under the table."

The good news is that both families and their nannies actually benefit from proper tax reporting. Employers are eligible for tax breaks, such as the Dependent Care Account, to offset the cost of the taxes. Nannies are able to take advantage of the benefits available to most working people, such as Social Security, unemployment, disability, etc. But employers can only benefit from the tax breaks if they are paying their nanny legally.

Read more about the Top 3 Benefits of Reporting Nanny Taxes »

What Can Happen if You Pay Your Nanny "Under the Table?"
Maybe nothing...unless you get caught. What's the risk? Here's the list of possibilities: tax evasion charges, back taxes with penalties and interest, liability for the employee portion of FICA and, in some cases, loss of professional license.

If you can't imagine what would bring about such a scenario, here's a simple example. Your nanny works for you for several years receiving under the table pay. When the kids are in school full time, you decide to part ways since her services are no longer needed. She files for unemployment and is required to list her past employers, which includes your family. The unemployment office reviews the case and finds that your family didn't file any tax returns or pay into unemployment. Your ex-nanny is refused benefits and you're landed with a state and federal tax audit.

And don't try running your nanny's payroll through your business either -- it's illegal.

As of April 2006, the IRS has started to crack down on employers who pay cash or under-report via misclassifying their employees as independent contractors, so you need to be cautious.

Our recommendation is to opt for the peace of mind that comes with knowing you're abiding by the law. Paying your nanny properly, and legally, helps ensure a healthy, long-term relationship and protects both of you from an expensive and possibly damaging tax audit or refusal of benefits.

For help on how much you should be paying in nanny taxes and saving on tax breaks, check out our Nanny Tax Calculator.

Your Next Steps:

* The tax information contained in this article should not be used for any actual nanny relationship without the advice and guidance of a professional tax adviser who is familiar with all the relevant facts. The information contained herein is general in nature and is not intended as legal, tax or investment advice. Furthermore, the information contained herein may not be applicable to or suitable for your specific circumstances and may require consideration of other matters.
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Comments (127)
Photo of Stephanie B.
Stephanie B.
Hi Lauren!

I'm so sorry to hear things haven't been going well with you and the family you work for. It's very odd that the family has gone through the process of withholding taxes from you all year, but didn't produce a W-2 for you. They should have all the information they need to properly generate the form. You are correct that you should not receive a 1099 and I would advise you to ask the family for a W-2 instead. They may have made an honest mistake.
Posted: April 15, 2014 at 4:02 PM
Lauren M.
I have a question: My employers were deducting "childcare taxes" from my paychecks and then served me with a 1099 right before April 15. We have contacted irs about the 1099 issue because I qualify for a w2 instead. I have continuously gotten screwed over by these employees and would like to know if her taking taxes out of my check for Childcare was legal or not?
Posted: April 15, 2014 at 9:54 AM
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Stephanie B.
Hi Jane!

Thank you for your willingness to pay attention to the federal and state tax laws. A lot of people in your situation wouldn't take that course of action. There is a decently long list of items you'll need to do to catch up, but the good news is the state is generally willing to waive late filing penalties for first-time violators that didn't know of their tax obligations and are just trying to do the right thing. You'll just have to write a letter requesting this action. To see what you'll need to do, please refer to this article on Care.com. (http://www.care.com/child-care-last-minute-tax-tips-for-families-p1017-q40712187.html)
Posted: March 26, 2014 at 6:51 PM
Jane L.
I paid a nanny/babysitter around $3000 last summer in cash, under the assumption that she would not be reporting this income (we never discussed it, to be fair). I was unaware at the time of the $1800 threshold for witholding SS and Medicare. As tax time is fast approaching, she recently told me she will be reporting the income, so I need to know what to do to make sure I am compliant with the law and my own taxes.
Posted: March 26, 2014 at 10:48 AM
Photo of Stephanie B.
Stephanie B.
Hi Ebele!

This is a common question I hear this time of the year from nannies that don't earn enough for the family to withhold taxes from their pay. It's admirable that you're so sensitive to your personal information - and totally understandable given how much identity theft goes on. But in this case, you're totally fine with providing your SSN to the family because they are just trying to apply the wages they paid you to the Child and Dependent Care Tax Credit (IRS Form 2441). This allows them to save up to 20% on the wages they paid you - $550 X 20% = $110. In order to properly file the form, they have to have your Social Security Number and name. By filing this form, you won't get in trouble with the IRS because your wages were too low to have taxes withheld. You can just claim this amount as "Other Income" and be just fine.
Posted: March 24, 2014 at 3:47 PM
Photo of Ebele J.
Ebele J.
Hi, I was payed $50 a week for 6hrs a week, I made only $550 working for this family for about 3months, now she texted me asking for my ssn meanwhile I asked her before I started working with her if she was going to give me a w4 and she said no since what she will be paying was too little.
She told me she would be loosing $110 if I didn't give her my ssn and I told her I will give her the $110 because I didn't know what else to tell her, now she's asking me for the $110.What do I do? I don't want to have issues with her or IRS.
Posted: March 24, 2014 at 1:08 AM
Photo of Nadia K.
Nadia K.
I would appreciate more information for nannies, not only employers. Nannies need to have access to all important information as well.
Posted: March 14, 2014 at 4:37 PM
Photo of Chandra F.
Chandra F.
I have really enjoyed reading all of the posts, and learning all of the important information about nanny taxes.

Sadly Im finding that after 10 years of being in childcare many families are now preferring to pay under the table, and since nannies need to work they often take the position often not knowing the financial repercussions. In the last year have been to a handful of interviews who told me they would hire me if I was willing to be paid under the table, but I refused to accept and kept seeking a family who would not only be truthful and law abiding but was willing to treat me as a professional.

Up until 2013 tax season all of my previous employers paid me legally. This tax season is the first time I faced a hard financial situation with an employer regarding pay and taxes.

The signed contract I had with this family included specific details on how they would account for employer taxes and payroll, yet they never took taxes out, so in my ignorance I assumed while still working for them that I would not cause friction and just file taxes as self employed. The family eventually decided to let me go with no notice, they did paid me two weeks severance pay because there was no cause on my part for the termination as stated in the contract. Yet because they never withheld taxes I was unable to file for unemployment and other forms of assistance when I was unable to find work for nearly two months after losing my position.

The complications of this situation are still continuing to follow me now that tax season is here I have discovered that I cannot legally file as self employed with an anual income from a specific employer over $1800. Since the income from this family is well over this amount I have decided to contact my previous implorer and request a W-2 even though it is past the deadline for employers to send them. I believe this would require the family to get and EIN, and pay ALL back taxes. The employer tax portion, and the employee portion, since they were required by law to withhold taxes from my bi-weekly paycheck and did not do so (at least this is what I have read on a few different articles). If the family decides not to comply with sending me a W-2 then I will file taxes as a misclassified employee which would cause the family to be audited, still pay all back taxes, and possibly fines for tax evasion which is considered a Felony. Some professions can loose their license and ruin their career for such dishonesty. From here on out I am going to tell families that I am not comfortable putting them at this risk if they want to pay me under the table. It is not worth the headache and especially not worth the potential consequences to the family.

I was also curious for future reference, if an employer is not keeping up on withholding from each pay check can they then decide to take the employee tax portion from future checks? Or are they now responsible for the taxes they did not withhold?

Thanks again for the helpful information!
Posted: February 27, 2014 at 3:11 AM
Photo of Stephanie B.
Stephanie B.
Hi LKF,

Your accountant is correct that you do need the Social Security numbers of those caregivers in order to apply their wages to the Child Care Tax Credit. The IRS Form 2441 your accountant will use specifically asks for them. That being said, you can explain to the 3 caregivers that you only need it for this form and that their personal tax situation is not in jeopardy at all because their wages were well below the $1,800 FICA threshold in 2013.
Posted: February 26, 2014 at 10:52 AM
LKF
2013 was my first year using nannies through care.com. I spent about $1,200 total and it was divided among 3 different nannies. I reported this amount on my taxes to receive the child care tax credit. My accountant has asked me to get the SSN's of each nanny right now. When asking for this, none of the nannies want to provide it because they don't want to pay taxes on what they received. Since my total was below $1,900, do I have to get this SSN information? Can I still report the $1,200 total without getting the socials? Thank you, not sure what to do here or what to do this year.
Posted: February 26, 2014 at 7:02 AM
Photo of Stephanie B.
Stephanie B.
Hi Michelle C!

The way Social Security & Medicare (FICA) taxes are set up by the IRS, an employee cannot pay their portion on their own. This is why it's required for the employer to withhold these taxes from their employee if they make more than $1,800 in 2013 ($1,900 in 2014). By withhold FICA taxes, the employee is essentially paying their share and then you as the employer account for the total amount on the Schedule H as you're now seeing. As the tax liability can be significant, you have the choice of having it offset any potential tax refund you receive with your personal income tax return or you can get on an Estimated Payment (1040-ES) schedule with the IRS and pay these taxes in 4 smaller increments throughout the year. The employee is given credit for the FICA taxes you withhold via Form W-2 Copy A and Form W-3 that you should file with the Social Security Administration during tax season.

We've covered the federal taxes, but you also need to cover your state unemployment insurance taxes because it doesn't sound like you've paid those. Most states require quarterly tax returns be filed, so you need to file those back tax returns as soon as possible.

For your employee, you don't have to withhold federal or state income taxes from her, but she needs to understand that she'll have to account for these taxes when she files her personal income tax return. That means it's very unlikely she'll get a tax refund and may owe quite a bit to the IRS. Moving forward, I would suggest having her fill out a W-4 and state withholding form so you can withhold these taxes. Yes, she takes home less each pay period, but most nannies don't budget for a year-end tax payment and it can throw them off if they're not prepared.

I wish you the best of luck getting your tax situation straightened out Michelle. If you would like professional help getting caught up on these taxes and having everything handled moving forward, Care.com HomePay can easily do this for you.
Posted: February 25, 2014 at 11:56 AM
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Stephanie B.
Hi Katie M!

Thank you for being so thorough with your question. It definitely helps me figure out the advice that is best for your situation. While I'm very excited that you landed a job, I am concerned about the wages you are being paid. At $1,750 per month and 50 hours worked each week, your gross wages actually fall below the minimum wage requirement in Washington, DC ($8.25/hour) if you are working every week of each month.

The Fair Labor Standards Act requires nannies to be paid overtime for all hours worked over 40 in a 7 day workweek. That means you are due 10 hours of overtime each week along with your 40 regular hours. At the $8.25 minimum wage, if you work each week of the month, your gross monthly wages should be a minimum of about $1,967. You should speak to the family about increasing your gross wages to at least this amount. If they need some help figuring out what to pay, please have them visit our paycheck calculator (http://www.breedlove.com/Resources/Nanny-Tax-Withholdings-Calculator.aspx).

In terms of paying taxes, you are correct that you should have them withheld. It's the right thing to do for the financial and legal benefit of both you and the family. Yes, it does decrease your take-home pay, but you'll also get the benefit of crediting your account with the Social Security Administration like you mention. The family must be on-board with this arrangement though because the IRS isn't set up for you to pay Social Security & Medicare taxes on your own. You can only pay federal and state income taxes if the family doesn't want to withhold those (I recommend they do).

Lastly, concerning vacation pay, this is something you need to discuss with the family because they are not required to provide it to you. Many families do extend a few vacation days per year to their nanny, because like all professions, it's a nice benefit to give. If they take you on vacation with them, just remember, you're on the clock when you're not free to come and go as you please. I know this is a lot of information to take in Katie, but I certainly hope I've helped you out.
Posted: February 24, 2014 at 3:40 PM
Michelle C.
Good Afternoon,
I hired a nanny last year. Upon her request we did not with hold Social Security or Medicare from her pay check (with the assumption that she would be responsible for her portion of the taxes). I would like to pay in the employer portion of the taxes (half of SS, Medicare and unemployment). I want to be fair and pay my portion. How do I pay the employer portion (alone) when filing my taxes? I am familiar with the Schedule H but do not see how I can pay the employer portion only. I am lost; any help would be greatly appreciated. Thank you!
Posted: February 24, 2014 at 3:27 PM
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Stephanie B.
Hi Jennifer K!

Thank you very much for the kind words. When I was trying to figure out nanny taxes for my nanny, there were no resources like Care.com around, so I have a soft spot for families seeking advice :)

You bring a really interesting question and the best way I can explain it is that IRS is basically asking, "Are you sure you didn't pay any wages this year?" They assume because you paid wages in 2012, you probably paid them in 2013 too. But because you didn't, you'll mark "No" for line 10-12 and attach a $0 Schedule H to your return. Seems a bit redundant, but that's the beauty of taxes sometimes.
Posted: February 24, 2014 at 12:52 PM
Photo of Stephanie B.
Stephanie B.
Hi Ryan!

I'm very impressed with your nanny tax knowledge! You've really done your homework. Yes, for your taxes, you only owe FICA for the nanny that earned $5,000 because those tax thresholds are per employee. I'm assuming your nanny understands the income taxes are her responsibility since you didn't mention filing those returns.

The one thing I did want to touch on is your federal and state unemployment insurance taxes. That threshold is generally $1,000 per calendar quarter and covers your total gross wages paid to all employees. Your state returns are generally filed on a quarterly basis and the federal taxes should be reconciled on your Schedule H.
Posted: February 24, 2014 at 12:37 PM
Katie M.
Stephanie B.

One more question: If the family that I'm working for is going on vacation for a week in April and not taking me with them, are they required to pay me for the time they are gone or if they choose not to am I just stuck being shorted that month? I'm new to all of this so I wanted to check!
Posted: February 24, 2014 at 12:36 PM
Katie M.
Stephanie,

I accepted a job as a full time nanny this weekend and am scheduled to begin next Monday. Upon meeting and discussing the salary the family told me that I would be paid $1,750 per month for 50 hour weeks. I was great with that (that's about $10 an hour) and although it was a little lower than what I would like to be living off of, I decided I could make it work.

After talking with the parents though, I learned that they have been paying their current nanny cash because that's what she asked for. They said that they will do it however I want, cash or a check, but if I want to fill out the paper and file taxes it will come out of my paycheck and they are not going to pay me any more than that.

In addition, are the parents required to pay social security on me? Someone needs to, so if they aren't I will have to and by the time it's all said and done, I'm pretty sure that takes my 1,750 down to about 1,300. For someone who was flexing with 1,750 (I live in DC and housing here is EXPENSIVE!), 1,300 is a BIG difference.

When I asked the mom about all of this, she said since right now we are only looking to work together until September to just think of it as a babysitting job. I don't want to only be bringing home 1,300 a month, but I don't want to get into a legal mess either!

Do you have any suggestions?
Posted: February 24, 2014 at 11:19 AM
Photo of Jennifer K.
Jennifer K.
Hello Mrs. Breedlove,

I appreciate your your time and knowledge in helping individuals on this site. I would like to ask your advice on an issue. My wife and I employed a nanny in 2012 in which we paid over $1,800 in a year and over $1,000 in a quarter.


Schedule H, for 2013, line C addresses wages for 2012 or 2013. We only paid wages in 2012, none in 2013. In part II, questions 10-12, are the questions referencing both 2012 and 2013, or exclusively 2013.

If the questions are referencing only 2013, and we paid no wages in 2013, how would lines 10-12 be answered.

Very confused. Thanks.
Posted: February 22, 2014 at 11:55 PM
Ryan
I hired two nannies throughout the year. Nanny A earned gross wages of $5,000 and Nanny B earned gross wages of $1,500. I realize I only need to issue a W-2 for Nanny A as she exceeded the $1,800 threshold. I just want to confirm that I also only owe FICA taxes for Nanny A - so I would be responsible for 7.65% (each for me the nanny) on only $5,000 of what I paid, not $6,500. I've heard conflicting guidance on the $1,800 limit as it relates to employers - whether it is $1,800 per employee (no matter the number of employees) or $1,800 total for all employees you pay. I believe it is per employee but want to make sure. Thanks!
Posted: February 21, 2014 at 10:40 PM
Photo of Stephanie B.
Stephanie B.
Hi Anna!

I'm very sorry to hear you're in such a tricky situation. It's complicated because the family has already filed their taxes and in order to account for the childcare taxes, they'll need to amend their personal income tax return and file prior quarter returns with the state.

The reason why this must happen is because if nothing is done, your only way of properly filing your taxes is to file a Form 4852 with the IRS - which is a substitute for the W-2. You'll owe the income taxes that were never withheld and it's likely the family will be flagged by the IRS.

Regardless of what you decide to do, the family needs to start withholding taxes and set themselves up with the IRS and the state immediately. You don't want to be in this same position next year. Have the family give Care.com HomePay a call (888) 273-3356 and we can help them get everything straightened out from last year and moving forward.
Posted: February 21, 2014 at 12:06 PM
Photo of Stephanie B.
Stephanie B.
Hi Chris!

If you have an EIN through your business as a sole proprietor, the IRS will not allow you to set up another one for your household employer taxes. The best solution in this case is to have your spouse set up the EIN in their name. If you have an incorporated business or an LLC, you should be fine.
Posted: February 19, 2014 at 10:36 AM
Photo of Anna D.
Anna D.
Hello
I need help in making my decision in what to do. Ok, I'm caring for my friends child since he was 3 months old so almost a full year of care. I get paid cash no taxes filed or claimed. I receive $125 a week so basically a little over $4500 for 2013. The family already filed their taxes this year without claiming childcare since they paid me cash. So my concern is if I claim the money earn for the year and just let irs take the taxes due for the 2013 yearly income from that care would I be red flagging the irs to come after the parents even though I would be paying the taxes? I don't want to due any damage to our friendship or have them be in a audit circumstances by me claiming this on my return. Plus not to mention since the family is friends makes me worry about hurtful feelings etc. so I'm not sure if I should claim the childcare I done without upsetting them or have them in irs hit list
Thanks for any advice!!
Posted: February 19, 2014 at 10:05 AM
Chris
I have a small business and I have an EIN. I hired a nanny in 2013. Do I need a separate EIN to be a household employer and received child care credit? Confused about this.
Posted: February 18, 2014 at 8:49 PM
Photo of Stephanie B.
Stephanie B.
Hi Christina!

I'm so sorry to hear your last nanny job didn't end well. You're right that you were being paid below minimum wage and those laws cover your hourly rate BEFORE taxes are ever withheld. At 45 hours per week, you need to take into account 5 hours of overtime when calculating your hourly rate. With your $250/week, you were really earning $5.26/hour for the first 40 hours and $7.89/hour for each hour of overtime.

You're also correct that a nanny contract cannot circumvent federal or state law. If the family paid you $4,000, they should have been withholding taxes from your pay and paying their share of employer taxes. You also should have been given a W-2 to file your personal income tax return. You are well within your right to ask the family to report your wages and account for the appropriate taxes. If they refuse, you can still file a Form 4852 (substitute for a W-2) in order to legally file your taxes. You'll owe the income taxes that should have been accounted for, but at least you'll protect yourself. Just be aware that the IRS may audit the family when you file this form.

I wish you the best of luck sorting out your tax situation Christina!
Posted: February 14, 2014 at 10:10 AM
Photo of Christina Z.
Christina Z.
Hi Stephanie B,
I was a nanny and recently got let go because their baby was hitting my daughter too much. My employer and I signed a written agreement that they would pay me $250/week for working 45 hours per week. As a Paralegal I know that it is illegal to pay below the minimum wage requirement, even if agreed upon in a personal contract. Contracts must still conform to the law or else it is void. They don't want to report the $4,000 they paid me over the course of the time I worked for them in 2013. From what I understand, they can only pay me below the state minimum wage if they are withholding social security, medicaid, federal and state unemployment taxes. Can I request for them to pay my back taxes since they were only paying me $5.88/hr?
I appreciate any clarification.
Thank You,
Christina :)
Posted: February 13, 2014 at 9:22 AM
Photo of Stephanie B.
Stephanie B.
Hi Angela,

I'm very sorry to hear that a tax attorney of all people recommended you 1099 yourself. Not only is filing that form illegal if you're supposed to be classified as an employee, but it also means you pay more in taxes because you're accounting for both the employer and employee halve of Social Security and Medicare (a total of 15.3% of your wages).

Anyway, back to your question. Thank you for providing the additional details because it does seem like you are indeed an employee of the family. Most household employees work in the home of the family that they're providing care to, but it's not uncommon for a working arrangement to be set up like the one you have.
Posted: February 12, 2014 at 7:35 PM
Photo of Angela S.
Angela S.
Thank you for the response Stephanie! The family does set the schedule and provide the baby's bottles, formula, diapers etc...so I will take that to mean that I am their employee. One more question if you don't mind. I do have my own two biological children at home with me while I am caring for the baby. Does this have any barring on my status or would I still be an employee? Surprisingly I have contacted a local tax attorney who was completely misguided and saying that regardless of what the "law says" I needed to file a 1099 because that's just the way it works in the real world and good luck getting the family to cooperate otherwise. I was shocked to hear that, and so glad I came here for accurate information. Thanks again for all your help!
Posted: February 12, 2014 at 3:48 PM
Photo of Stephanie B.
Stephanie B.
Hi Angela!

It all depends on who has control of the relationship. You're still the family's employee if they determine what days of the week you watch their child, how many hours you'll work each day, if they bring food and toys over to your home for the child, etc. If the opposite is true, you may be considered an independent contractor. Without these details, I can't 100% tell you where you fall, but take a look at this IRS article and hopefully you'll be able to see how you should be classified. (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee)
Posted: February 10, 2014 at 5:19 PM
Photo of Angela S.
Angela S.
What if I'm a nanny in my own home? I only keep one child, but the parents bring her to me, am I still considered a household employee or does that make me an independent contractor?
Posted: February 09, 2014 at 7:50 PM
Photo of Stephanie B.
Stephanie B.
Hi Molly!

You bring up a great question and the answer lies in who has control of the working relationship. Even if the work is done at the other mother's home, if you have control over what work is done, how it's done and what the hours are, she is probably your employee. However, if you are working on the other mother's schedule to fit your childcare needs in with when she is home, she may be considered self-employed. I don't have enough information here to determine a classification, so I would recommend reading this article from the IRS (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Hiring-Household-Employees) and if you're still stuck, you can file a Form SS-8 and the IRS will give you a determination free of charge.
Posted: February 07, 2014 at 5:05 PM
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Stephanie B.
Hi Bess!

Negotiating a rate of pay should always be done on a gross wages (before taxes) basis. It's how the family and you will report taxes and how every other profession in the working world operates. At $16/hour, you'll have Social Security & Medicare (FICA) taxes withheld - and I would also recommend having federal, New York state and New York local income taxes withheld so you don't owe them all at the end of the year. FICA taxes are 7.65% of your gross pay, but the income taxes all depend on how you fill out your federal and state W-4 forms. A ballpark estimate of these taxes would be about 10% of your gross wages. All total, you're looking at your $16/hour being more like $13-$14/hour in take-home pay after taxes.

If you want to take home $16/hour, you'll really be asking for something like $20-$21/hour. Keep in mind that the family is charged this amount, plus they have to pay taxes assuming $20-$21/hour, so this increases their tax cost. In the end, you and the family need to find a way to negotiate your pay rate to where both sides are in agreement and taxes are being withheld. If you want to run some calculations for yourself, please use our free Paycheck Calculator. http://www.breedlove.com/Resources/Nanny-Tax-Withholdings-Calculator.aspx
Posted: February 07, 2014 at 4:49 PM
Molly
I take me son to a SAHM's home about 12 hours a week. She is not technically an in-home daycare provider, as my son is the only child besides her own that she cares for. She has never cared for my son in my home. What would her status be?
Posted: February 06, 2014 at 11:49 PM
Photo of Stephanie B.
Stephanie B.
Francesca,

I'm not exactly sure why the family opted to give you a 1040A instead of a W-2. There is a lot of misinformation on the Internet, so maybe that's an explanation. The difference between the 2 forms is that a 1040 the form you send to the IRS declaring your total income and total tax liability for the year whereas the W-2 is from your employer and summarizes the wages they paid you and the taxes they withheld. Families that don't provide their employee with a W-2 can face penalties if they are caught because the IRS considers it to be tax evasion.

That in itself is a risk families shouldn't take. However, in speaking with the family about having taxes withheld, show them this article about the benefits of being paid legally (http://www.breedlove.com/Answers/EmployeeInfo/WhyProfessionalPayPaysOff.aspx). If they flat out refuse to give you a W-2, the only way to legally report your income - because the IRS says you must report your wages - is to file an IRS Form 4852, which is a substitute for the W-2. You will write out the wages you earned, the taxes withheld, the family's information and what steps you took to try and get a W-2. When the IRS receives this form, they will most likely audit the family to figure out why taxes were never paid. It's a tricky situation to be in, but as a last resort, it's the only thing some employees can do. I sincerely hope everything works for you Francesca and please let the family know that Care.com HomePay specializes in nanny taxes and we can help them get caught up and have your payroll handled correctly moving forward.
Posted: February 06, 2014 at 5:04 PM
Photo of Bess G.
Bess G.
So I have an interview on Sunday for a part time nanny position. The position is 8:30-1:30 M-F and they are wanting to pay $16/hr. I am not sure whether that will be taxed or not but I believe it is a considerable amount of money, enough that I/they should pay taxes. If it does have to be taxed, I don't think 16/hr is enough money (in a nice neighborhood of Brooklyn NY)--my occasional babysitting rate is 16/hr cash/untaxed. So what do I do? How much money should I bargain for or how do I handle taxes...I am overwhelmed by the information I have read...what is a step by step need to do?

Thanks!
Posted: February 06, 2014 at 5:02 PM
Francesca C.
thank you Stephanie!
i will talk to them about withholding taxes from me this year very soon! what if they don't want to?(they are very tricky people to talk to)
can they face consequences for not giving me a W2 in the beginning?
why did they choose to give me a 1040A instead? whats the difference?
thank you
Posted: February 05, 2014 at 2:49 PM
Photo of Stephanie B.
Stephanie B.
Hi Francesca!

I'm very sorry to hear you were not given a W-2 like you were supposed to. The family should have been withholding taxes from you during 2013 so you wouldn't owe the government so much during tax season. What's happening is the federal government is asking you to pay the income taxes that were never withheld all at once. The best way to keep this from ever happening again is to get the family to start withholding taxes from you. It's very risky for them to not pay their taxes and it obviously hurts you during tax season. Share this article with them so they understand what they need to do and have them contact Care.com HomePay and we can get their tax situation straightened out.
Posted: February 04, 2014 at 5:33 PM
Francesca C.
i work as a nanny and the parents did NOT give me a W2 form in the beginning, but i gladly gave them my SSN, i just now got a 1040A tax form to fill out.... why didn't they give me at W2?? and is it normal to have to pay 5,000 at the end of the year... oh boy what did i get my self into that is a lot of money i have to pay. do they get money back for having a nanny? thank you!
Posted: February 04, 2014 at 2:25 PM
Photo of Stephanie B.
Stephanie B.
Hi Lauren!

This is Stephanie Breedlove with Care.com HomePay and I'll be happy to help you out. I'm really sorry to hear the family did not follow through with their plans to pay you on the books, but I'm glad you know that filing a 1099 is not the way to file your taxes. My usual advice is to work with the family to get things straightened out, but it seems you've already tried and it was unsuccessful.

The only other way to correctly file your taxes is to file an IRS Form 4852, which is a substitute for a W-2 (the form you should receive as a household employee). When you file the 4852, you will be asked for the wages you earned, any taxes withheld, the family's information and what steps you took to try and get a W-2. Please be aware that you will owe federal and state income taxes on the wages you earned because the family is not legally obligated to withhold them from you. Additionally, there is a good chance the family will be audited when you file the Form 4852 because the IRS will want to know why no Social Security or Medicare taxes were ever withheld.

I wish you the best of luck moving forward Lauren!
Posted: February 03, 2014 at 11:53 AM
Photo of Lauren B.
Lauren B.
I desperately need help with my nanny taxes!! I worked for a family in 2013 that planned on getting an EIN and following all the correct tax procedures, but did not. I know that I have to pay in my share of taxes, but they are pressuring me to file as self-employed, and pay the whole 15.2%. I am certain they have already filed their taxes, and provided my social security number to claim the child care credit. I am so confused about what to do. I know that I was a household employee, and I should not have to file a 1099. At this point, what steps can I take to pay my part of the taxes in, but not their part? They have since moved out of state and are not willing to work with me on this issue anymore. I am stressed out and would appreciate any advice! Thank you!
Posted: February 02, 2014 at 3:35 PM
Stephanie Breedlove
Hi C M!

I'm sorry to hear that you're having trouble with your W-2. Unfortunately there is not enough information presented for me to know exactly how to help you. If you would like to call our office (888) 273-3356, we'd be happy to answer your question.
Posted: January 29, 2014 at 11:16 AM
Stephanie Breedlove
Hi Kim!

It's a good thing they did not give you a 1099 because that is not how a nanny is supposed to report her taxes. Instead, the family should give you a W-2 to file your income tax return. It has some of the same information included in your Payment Log, but also some additional identification information for you and the family that the IRS will need.
Posted: January 29, 2014 at 11:02 AM
C M
I started working as a "probationary employee" making $350 a week for the first month until we decided if I would stay on because I would then still be under the $1800. However, I did stay on and we then filed a W4 for taxes to be withdrawn from my pay. I quit a week later because my employer lost her mind. I got my W2 and my gross income is way more than I made and NO federal taxes were withheld. How is this possible? Please explain.
Posted: January 29, 2014 at 8:30 AM
Photo of Kim T.
Kim T.
I am utterly confused. I worked as a nanny in 2013 and was given a "Payment Log" from my employer. They took out the minimum requirement of Social Security tax, and Medicare each week.The log they gave me at the end of my employment shows the total wages, the total SS and Medicare withheld. They are not giving me a 1099, how exactly do I file my taxes? Everything I'm reading is for the employer, not the employee.
Posted: January 28, 2014 at 3:19 PM
Stephanie Breedlove
Hi J K!

You are correct that a W-2 is only required for employees that earned $1,800 or more in gross wages last year. Since your employee didn't cross this threshold, they'll simply report their wages as "Other Income" when they file their tax return.

The $1,000 federal unemployment insurance tax threshold you mention comes into play if you pay $1,000 or more to any number of employees in a calendar quarter. If you crossed this threshold, you need to file an unemployment insurance tax return with your state and fill out and attach a Schedule H to your personal income tax return.
Posted: January 27, 2014 at 4:45 PM
Stephanie Breedlove
Hi Maria!

You are correct. The family is probably catching up from not withholding or paying taxes in 2013 and is letting you know of the taxes you'll be responsible for. The family is responsible for Social Security & Medicare (FICA) taxes because you have no way of paying these on your own without paying back your half of FICA directly to them. But since the family is not obligated to withhold federal or state income taxes from your pay, you are technically responsible for this amount. You probably won't be assessed a penalty, but the amount of income taxes you owe will be deducted from any potential refund you may have been eligible for. Most likely you will owe the IRS money when you file your income tax return.

Moving forward, I would suggest having a nanny contract in place so you and the family will be on the same page when it comes to your tax withholdings as well as other important aspects of your payroll that may or may not currently be addressed. (http://www.care.com/child-care-sample-nanny-contract-p1017-q33455259.html)
Posted: January 27, 2014 at 4:34 PM
J K
I have hired several nannies last year and I want to do it properly, but I remain confused. Please help me!

Am I correct that I only have to issue my sitter with a W2 if I paid her more than $1800 a year? And then I submit that W" with a W3 along with my taxes, and I also report all that payment on a Schedule H attached to my tax return?

I see reference to a threshold of $1000 a year regarding FUTA. If I paid someone more than $1000 but less than $1800, what should I be doing? I had one person I paid $1250.

What if I paid someone just a few hundred dollars - less than $1000? What are my obligations for them?

I never managed to find one person to cover all my needs as a single working mother and I am really overwhelmed with what I am supposed to do. And realizing this is all due by this Friday!
Posted: January 27, 2014 at 1:31 PM
Maria B.
My employers paid me straight out with a check every week, but did no take any taxes out. We had discussed them paying all of it and nothing happened after awhile. Now I was told I need to pay my portion of the taxes. I am not sure what I should do to pay my portion or figure out how much I need to pay. Everything I read says they are not required to withhold my federal and state taxes, but are suppose to withhold medicare and social security. Does this mean now they have to pay my portion as well since they never withheld it? I am going to be paying penalties since I was not making any kind of payment through the year?

Any help is appreciated, Thank you.

M B
Posted: January 24, 2014 at 2:31 PM
Stephanie Breedlove
Hi Kayla!

The designation of whether you file taxes as an employee or self-employed rests with who has control of the employment situation. So even though you worked sparingly for each family, it sounds like you were still working in their home, following their rules and working the hours they designated. This would most likely be considered an employer/employee arrangement by the IRS.

As far as taxes go, as long as you didn't cross the $1,800 threshold last year (it's $1,900 in 2014), you don't have to worry about not having taxes withheld. And that $1,800 is for each family - not your total income for all the babysitting you did. If you never crossed that $1,800 threshold, filing your taxes will be easy because you'll just report the total wages you earned as "other income." The IRS will deduct the appropriate taxes from this amount when your return is being filed.

I wish you the best of luck finding full-time employment with a family. Just make sure you are set up "on the books" from Day 1 so you and the family don't run into tax issues down the road.
Posted: January 21, 2014 at 11:15 AM
Kayla C
I have babsat since I was 14 when it was only occasional, but am 19now, have been working more and more over the years, and am looking for full time work this year. Over the last 2 years, I've cared for at least 15 different families in THEIR homes, on occasional and weekly basis. I was taking calls and filling my schedule that way. Only recently did it hit me that I could be audited for being paid 'under the table', but it would have been crazy to fill out tax information for 7-10 families every month. I worked by reference, not through an agency or even on regular schedules usually. With some health problems and a hard time finding good hours for my experience, I think the benefits could have been helpful but after reading all this I still don't see how I'd have worked out taxes with so many families. Hopefully each has paid me little enough annually that i don't have to go through too much if it has to be figured out. Once I go full-time with someone, it would be less difficult. Though i work in homes, not mine, I feel somewhat self-employed as I filled in my own schedule the past couple years and was not always a regular worker.
Posted: January 20, 2014 at 3:43 PM
Stephanie Breedlove
Hi Renee!

I appreciate your kind words! However, in your particular situation, the tax assistance you will need is not something I am an expert in and I would hate to give you the wrong advice. Care.com HomePay specializes in only household employment taxes and payroll and you require the assistance of someone specializing in business taxes. I would suggest visiting the AICPA's website (aicpa.org) to find a tax professional in your area that can help.
Posted: January 03, 2014 at 12:08 PM
Stephanie Breedlove
Hi Danielle!

If you were paid under the table, there are a couple of options available to you. The first is to work with the family so they can appropriately issue you a W-2. They still have time to do this because W-2s are not due until January 31. The FICA taxes that were not withheld from your pay will need to be accounted for either by you or the family in order for your W-2 to be accurate.

If the family does not wish to provide a W-2, you may file your taxes using IRS Form 4852 which is a substitute form the IRS accepts. However, be aware that the IRS may audit the family when you file this form because they will want to gather more information about why taxes were not withheld in your situation. Obviously the first option would be the best scenario for both you and the family.

I wish you the best of luck moving forward Danielle.
Posted: January 03, 2014 at 12:02 PM
Photo of Danielle D.
Danielle D.
Hi i am the nanny in question and i no longer work for said family .That being said i worked for 6 months at $400 a month(was told tht was all they could afford and i love children) any way it was cash under the table what should i do for my taxes how do i show on my taxes i worked? Help please
Posted: January 02, 2014 at 9:56 PM
Stephanie Breedlove
Hi Miranda!

Even though it is not required of you to issue a W2 to an employee that does not cross the $1,800 FICA threshold, you may still do so and I would recommend it in your case since you have a long-term employee that will already need a W2. By reporting that you have withheld federal and state income taxes from the 2 short-term nannies on their W2s, you will also account for these taxes on your Schedule H and personal 1040.
Posted: December 30, 2013 at 3:27 PM
Miranda J.
Hello! We had 2 nannies quit after only a few weeks and then found someone who stayed for the rest of the year. For the first nanny, we offered to pay her portion and ours of the FICA taxes and then withheld federal and state income taxes. For the second nanny, we withheld FICA taxes and her federal and state income taxes. We didn't end up paying either up to $1800. We have refunded the second employee the FICA taxes we withheld. Since we withheld income taxes, we still plan on issuing W2s. Can we issue W2s showing no FICA tax withholding and only the federal and state income tax withheld? Or how should we handle this situation?
Posted: December 26, 2013 at 8:13 PM
Stephanie Breedlove
Hi Sadie!
For all intents and purposes, each family is considered a separate household employer in the eyes of the IRS and the state. They will each have to obtain federal and state IDs, file federal and state tax returns and follow other household employment laws. The only thing the families are splitting are the expenses of hiring the nanny.
Posted: November 14, 2013 at 10:29 AM
Sadie
Hi!
My family and two others are considering hiring a nanny to work in my home, taking care of three kids. How will we handle the taxes?
Posted: November 13, 2013 at 3:34 PM
Photo of Renee M.
Renee M.
Hello, I have some questions about this tax information and I appreciate the fact that Stephanie Breedlove is giving information away for free. :-) I am going to be watching an infant in my home. I understand that I am not considered as an employee of the person hiring me. I still have to pay taxes on my income that I receive because it will be over the 1800 a year cap. I know I can file under my normal personal filings as my normal income but I want to separate this from my personal life. Is there anyway I can sign up for a IRS filing number without being a business and pay quarterly taxes to that IRS filing number? I can write off the expenses of the part of my home I use, meals I provide etc.? And what form would I use to file if I used a separate IRS filing number? And during the year I should withhold federal, state, medicare and ss right? I just want to make sure I make the right decision on the taxes so I do not end up owing at the end of the year. Thanks so much!
Posted: October 17, 2013 at 1:33 PM
Stephanie Breedlove
Hi Christiane!

The accountant you spoke to is correct. You are not able to pay your Social Security & Medicare taxes as an employee. Your employer withholds these taxes from your pay and remits them to the IRS four times per year. Based on your description, I am worried that you or the family incorrectly believes you are an independent contractor. These types of workers are provided a Form 1099 and pay the appropriate taxes. But nannies and other household workers are classified as employees by the IRS and your employer is required by law to provide you with a W-2 at year-end to file your personal income tax return. I hope this helps Christiane!
Posted: October 17, 2013 at 11:33 AM
Christiane T.
So i started working as a full-time nanny in September.When i went for the interview we never discuss about Paying my taxes.I figured that i would do my taxes by myself.But now when i went to talk to an accountant about how to pay my taxes he asked me for my employer's information.I did not give it to him because i did not feel comfortable giving this people information to anyone.Then he told me my employer should be the one paying for my taxes,since i go to their home to care for the two kids.I was wondering is the any possible way for me to pay my taxes by myself?
Posted: October 16, 2013 at 9:46 PM
Stephanie Breedlove
Hi April!

The FICA withholding threshold is also the same threshold the IRS uses to mandate the reporting of wages. Since you will be paying your nanny below $1,800, you do not have to provide her with a W-2 during tax season. The nanny will simply report the wages as "Other income" when she files her personal income taxes.

You do need to pay attention to her total wages though because if she earns more than $1,000 from October 1 through December 31 ($500 if you live in New York or Washington, DC and $750 if you live in California), you will need to file an unemployment insurance tax return for the fourth quarter of 2013 and pay the corresponding taxes.
Posted: September 25, 2013 at 4:13 PM
April L.
Hi, I have a question regarding the nanny tax. I am hiring a part-time nanny for the rest of this year. I am sure her total pay will be less than $1,800. In this case, should I still fill out a W-2 form for her and send the form to her early next year? Thank you!
Posted: September 24, 2013 at 11:05 PM
Photo of Syn F.
Syn F.
I would like to know how an employer/family thinks they are "giving" a nanny a "free place to live" when she is WORKING FOR IT. If you require a live-in, that is for YOU, not the nanny. Live-in nannies sacrifice freedom, privacy, and off-duty time because they always work more. Parents know they can leave early and stay late because the nanny is already there. That's why they have a live-in. Even if they are "off-duty", they are still "at work"; they can't leave and go home at the end of the day. They can't simply ignore your family because they are off-duty. Maybe if your nanny suddenly needed a place to live and you took her in, that would be "giving" her a place to stay. But, if you hired a live-in, you are not "giving" her anything--you are requiring that she live with you in order to have the job. Something that is "free" does not require that you work for it.
Posted: September 01, 2013 at 4:51 AM
Photo of Syn F.
Syn F.
To the woman who complained about her "unappreciative" nanny, your thinking is exactly the reason the nanny profession is so disrespected and nannies end up exploited. Your nanny had "free TV"? You mean you went out and bought one just for her? She had free cable? You didn't have cable for you and your family, but you paid for it just for the nanny? Or, did it cost you extra for the nanny to watch your TV? Free furniture? You mean you went out and bought all new furniture for the nanny's sole use? Because, if not, you are WAY OFF, here. You do not pay anything extra for a nanny to sit on your chairs or sleep on the bed in your guest room. You do not pay for the nanny to watch a TV you already have or cable you already subscribe to. (You might pay $6 for an extra cable box, but that's it.)
When you work for a company, do you consider the office furniture "free furniture" for YOU? Are you getting free utilities because the company pays the water and electricity bills? A nanny's presence in your home does not suddenly necessitate water, gas, and electricity--these are all things you have, anyway. (Perhaps there will be a slight increase, but nothing substantial.) Your home is a nanny's place of work. OF COURSE you pay the bills and furnish the place. And, yes, she should get paid overtime which is time and a half. Maybe it's true that a live-in in your state does not require overtime pay, but I have never heard of any such labor law. Why should the person who takes care of your precious children NOT get the legal, normal provisions? Your garbage man gets overtime. Your UPS carrier gets overtime. Why wouldn't your nanny??? And, you think you are generous for paying her "way over minimum wage"? Would you feel like YOUR boss was generous if HE/SHE did that? Minimum wage is not enough to live on. "Well over minimum wage" is certainly not great pay. Now, I understand why people on this site think having a live-in nanny means not paying her much because she is getting so much "for free"--including furniture and TV. No wonder they think $7-10/hr is plenty. Based on what you've said here, these families think that sleeping in their EXTRA bedroom (they did not BUILD a room when they hired her) is equal to a generous salary--so why should they pay more than a teenager gets at McDonald's? I finally get it!
Posted: September 01, 2013 at 4:36 AM
Stephanie Breedlove
Hi Lisa!

In looking at the list of expenses you have, the only one that has any tax implication for you is your nanny's mileage. You can reimburse your nanny for the miles she drives while on the job (not including her commute to and from your home) at the federal rate of 56.5 cents/mile and this compensation is not taxable. However, mileage and the other items on your list are not expenses you can write off. I'm glad you're taking advantage of the childcare tax credit and your flexible spending account though. Many families don't realize these tax savings are available to them.
Posted: August 20, 2013 at 11:30 AM
Lisa
Hi! Our nanny and a few other people have claimed that we can write off certain expenses related to her employment etc. For example, the taxes we pay for/on her, mileage/gas paid to her, a part of our utilities (heat, electric), certain memberships (zoo, etc), supplies, and so on. Is this true? And, if so, where can I find more information about this? That is other than the child care credit & dependent account - we could utilize those if we were doing daycare as well - so I don't see those as a tax benefit to having a nanny.
Thanks for your help!
Posted: August 19, 2013 at 7:49 PM
Stephanie Breedlove
Hi April!

It is better to be safe than sorry (as clich as that sounds), so you should withhold Social Security and Medicare taxes from your nanny from the first day she works for you. If she does stay with you long-term, you'll be in compliance because you will have withheld taxes from the first dollar she earned. If things don't work out and she doesn't cross the $1,800 threshold, you can simply refund her the taxes you withheld. Please be aware though that if she crosses $1,000 in gross wages, you will be responsible for paying state unemployment insurance taxes.

Good luck with your new nanny and I hope everyone works out in a positive manner!
Posted: July 31, 2013 at 12:26 PM
April L.
Hi,

I am thinking about hiring a nanny and I have several questions regarding the social society and medicare taxes. My first question is : should I withhold social security and medicare taxes from the first day that nanny works with me? In the beginning of hiring a nanny, I may be not sure how long I will hire her or if I will pay more than $1,800 for her. In this case, should I still withhold the social society and medicare taxes? My second question is: should I pay for the social society and medicare taxes for all her wages or subtract the amount of her wage with 1,800? Thank you!
Posted: July 30, 2013 at 8:45 PM
Stephanie Breedlove
Hi shapedworld! When you talk about paying a nanny with pre-tax dollars, I'm assuming you are talking about using a Dependent Care Flexible Spending Account (FSA) that you have set up through your job. Remember, the cap on your FSA is $5,000 so only the first $5,000 of your nanny's salary is pre-tax. In terms of how to calculate the savings you will get from using the full $5,000, that is tough for me to determine simply because I don't know what your marginal tax rate is. However, most families that Breedlove & Associates works with save around $2,000.
Posted: July 10, 2013 at 10:58 AM
shapedworld
Do i have to pay nanny tax if I'm paying her with my pre-tax salary ? If yes, how to calculate it?
Posted: July 09, 2013 at 5:56 PM
Stephanie Breedlove
Hi A B! Absolutely there is a solution for your tax and payroll needs and that's where I can be the most help to you. I am the head of Care.com HomePay and founder of Breedlove & Associates and all we do is handle the payroll and tax needs for families with household employees. Please feel free to give the office a call at (888) 273-3356 and one of my colleagues will be happy to assess your needs and get everything set up for you.
Posted: June 03, 2013 at 12:14 PM
A B.
Hello,
Is there a simpler way to go about addressing my nanny's tax needs? Couldn't we go through a payroll company? And if so, are there pitfalls that we should be aware of in doing so? Thank you
Posted: June 01, 2013 at 7:54 PM
Stephanie Breedlove
Hi Dee! A flexible spending account is set up through a company's human resources or administration department as an employee benefit. It is not considered insurance, but rather a way to set aside money pre-tax for qualifying expenses. In the family's case, they have a dependent care flexible spending account and are setting aside as much as $5,000 for childcare expenses. These expenses include the wages they pay you. The family proves the money is going toward childcare expenses usually by giving their plan administration or HR representative a copy of your paystubs, so I'm not sure why they are asking you for an invoice.

Because the family must regularly pay taxes, they should already have accurate records of your gross pay and the taxes they have withheld from you throughout the year. None of these processes should affect you, but if the family has somehow lost your payroll records, you would be doing them a very nice favor by going back and writing down the dates you were paid this year and how much you were paid.
Posted: May 31, 2013 at 10:05 AM
Photo of Dee K.
Dee K.
My family wants me to give them an invoice so they can use flexible spending account through their medical insurence.How will this effect me?
Thanks Dee
Posted: May 30, 2013 at 5:09 PM
Stephanie Breedlove
Hi Katie! The requirement for minimum wage is outlined in the Fair Labor Standards Act and applies to all household employees. Whether an employer files taxes or not does not exempt them from paying minimum wage. In fact, one of the ways people that pay under the table are caught is from an employee filing a wage dispute for overtime or minimum wage. When the state investigates the matter, they find no record of the employer because the employer hasn't paid taxes.
Posted: May 29, 2013 at 11:07 AM
Photo of Katie C.
Katie C.
for your employer to file childcare taxes, don't they at least have to pay you min wage?
Posted: May 29, 2013 at 8:30 AM
Stephanie Breedlove
Hi Lisa,

You bring up a very common question that many families ask. Taxes are due when your nanny crosses certain wage thresholds, so it doesn't matter whether she works 5 days per week or 2 days per week. Once she earns $1,800 in gross (before taxes) wages, you are required to withhold Social Security and Medicare taxes from every dollar she earns and pay the same Social Security and Medicare taxes on top of her wages to the IRS four times per year. You are also required to pay federal and state unemployment insurance taxes if she earns more than $1,000 in a calendar quarter.

As a household employer, you are not required to withhold federal and state income taxes from your nanny's pay, but I would recommend it so she doesn't owe them all in one lump sum at the end of the year. Good luck with your hire Lisa and if you need any other information relating to nanny taxes, please visit www.breedlove.com and you'll be able to quickly find what you're looking for.
Posted: May 22, 2013 at 12:35 PM
Stephanie Breedlove
Hi Tata,

Someone who runs an in-home daycare would not be considered your employee and therefore you don't need to worry about paying any employment taxes. All you need to do is simply pay the fees she charges.
Posted: May 22, 2013 at 11:46 AM
Photo of Lisa O.
Lisa O.
I'm looking to hire a part time nanny, two days a week. Would the taxes still apply since it's not a full time position? I'm working with an accountant as well to help sort all the information out but am trying to get as much information as possible before posting an ad.
Posted: May 22, 2013 at 9:40 AM
Stephanie Breedlove
Hi Celeste! According to the Social Security Administration, a person on Social Security Disability is eligible to work and will simply have their benefits decreased based on how much they earn from their job. If your friend is worried about going over $1,000 gross, she should ask the family to consider a non-taxable form of compensation in her work agreement such as health insurance to offset the difference between the $1,400 gross they are offering. Her gross wages would show $1,000 per month, but she would receive an extra $400 in benefits.
Posted: May 15, 2013 at 12:31 PM
Tata
Question about in home day care.
If my child goes to some one else's house and they set up as in home day care (take care of 4 other kids). Do i need to worry about taxes on my part (as parent)?
Thanks.
Posted: May 15, 2013 at 12:20 PM
Celeste S.
Hi I have a friend who.is on disability social security and has been on it.for.years She had nine trial months to make income at a corporation where she worked and they go by the gross amount Somehow despite being honest to social security, They came back ten years later or so saying that she was overpaid by ss and owes them thirty thousand because of a miscalculation of just one month of making fifty gross amount too much! Her husband lost his job she reinstated her disability and has to have half paid back to social security and half to her and then was told that she can work and still survive on half social security and the take half already but she cant gross over 1000 a month,so basically she worked in retail and has to watch every cent(nearly impossible) to the point where she told her boss that she has tocut a day off that week of work which she then not only loses pay because she made some retail but has to lose hoursbcause she is limited and there is no full time work nor could she survive on half of disability and the low maximum income combined with the small amount of social security Now that she is ten thousand away from paying back the overpayment, social security had the nerve to send a recent letter saying that now eighteen years later,the firstamount they gave her(she was out of work disabled) social security wants to go back eighteen years now and make her pay when she was unaware of payment amounts prior to her trial months!! Well my question for her is now she is a nanny with half of the disability and is afraid to have another nightmare happen if she is paid by taking out taxes and again if the family she works for claims her on their taxes and the gross amount is over the allowed limit, then what is she responsible for? Will this affect her and then she will be charged more again since she is only allowed tp gross a thousand per month? Its tricky as some months have five weeks and the family is going to pay her the gross amount of aboyt 1400 a month Sorry the story was long but it is confusing What should the nanny and family do claim that they pay her gross 1000 to save the headache of her being forever in debt to keep paying or since the family she works for has one in daycare they already claim her and there will be just an infant that the nanny will be caring for.Does the family have to claim the nanny expenses for one child and one for daycare? How will this affect both parties? Thanks for your help,
Ceecee
Posted: May 10, 2013 at 3:46 AM
Stephanie Breedlove
Hi Phala! NannyShares are a great way to split the cost of a professional nanny without compromising any of the tax savings. From a tax standpoint, both families are considered household employers and need to maintain separate records with the IRS and state agencies. But because both families are incurring childcare expenses, both families can receive the benefits of paying childcare expenses through a Dependent Care FSA and/or filing for the Tax Credit for Child or Dependent Care (IRS Form 2441). Because you are splitting the nanny's wages evenly, you are also paying only half of the employment taxes as well. After factoring in the tax breaks, many families in a NannyShare break even or even save money at year-end. If you'd like more information, please give us a call or visit our website: http://www.breedlove.com/Answers/ExpertAdvice/NannyShare.aspx
Posted: May 02, 2013 at 3:31 PM
Phala A.
My friend and I are planning to do nanny share for our kids in my home. We are quite worry about taxes and all the other deductions. Do you think this route is better than just to put kids in daycare? We do want to save money though, but worry nanny share might not have any perks/benefits when it comes to tax return for us. Please help!! Thanks!!
Posted: May 02, 2013 at 10:29 AM
Stephanie Breedlove
Hi Dennis! I'm glad to hear you have a flexible spending account set up for your childcare expenses. It has the biggest tax savings because the expenses you pay with it are pre-tax. There are no additional tax documents you have to file. You just need to make sure you document your nanny's payroll so you can prove the money is going toward childcare expenses. Most of the time, your nanny's paystub will be sufficient proof, but it wouldn't hurt to ask your plan administrator or HR representative how to best document your expenses.
Posted: May 01, 2013 at 10:12 AM
Photo of Dennis D.
Dennis D.
Hi, I have a flexible spending account setup with my employer that will cover $5000 a year for expenses such as daycare. I intend to hire a nanny through care.com to watch in their own home. How can I make sure that I am able to claim the expense on my taxes?
Posted: April 30, 2013 at 6:41 PM
Stephanie Breedlove
Hi Rachael! Because it appears you set the schedule for when she watches your children, the nanny is your employee and you will need to pay the appropriate nanny taxes. There is no need to split up the time where she watches your kids at her house because the employment relationship does not change.
Posted: April 26, 2013 at 4:08 PM
Rachael H.
I pay a nanny to come to my house part-time to watch my two daughters. She also brings her own son every time. Occasionally I take my girls to her house where she watches them. Do I have to pay regular nanny tax? Should I pay her separately for the times they are at her house? Are there any tax advantages to me since she brings her own son to my house?
Posted: April 25, 2013 at 6:25 PM
Stephanie Breedlove
Wendy: As a new household employer, there are quite a few things you'll need to familiarize yourself with (too many for me to list here). So what I would suggest is visiting our website, www.breedlove.com, and taking a look at our Compliance Checklist (http://www.breedlove.com/Answers/ExpertAdvice/ComplianceChecklist.aspx). This will have all the items you will need to complete to stay in compliance with all the tax and labor laws concerning household employment. If you get stuck, please feel free to give us a call. Good luck!

Amanda: It's admirable that you want to help the family by doing your own taxes, but your accountant is right. Nannies and babysitters are considered employees of the family they work for, which means the family as the employer should be filing federal and state tax returns (usually quarterly) and providing W-2s to their employees. The only tax form household employees usually file is their personal income tax return (Form 1040).
Posted: April 22, 2013 at 12:42 PM
Amanda N
I just started a new nanny position this past October(2012) and wanted to make sure I was "on the books" since one day I'd like to have a mortgage and run my own in-home daycare. I talked with the family before started and decided to "do my own taxes" since one day I'd like to have a business figured to start now. So this past January I sent my coupons for federal and state taxes. Then I went to file my taxes, which was a little tricky since I only worked October, November, December 2012. Before that I did some occasional babysitting here and there. My accountant was a bit furious telling me I need to be put on a W2 as an employee. I filed everything correct, sent in a decent amount and I'm actually going to get some back! Is it really wrong for me to file my own taxes? I am your basic nanny, I go to their home and watch the kids, although we use my car and go out everywhere. Is there anyway I can keep filing my own taxes? My goal is to do this for a year and then work on having my own in home care.
Posted: April 21, 2013 at 10:45 AM
Wendy R.
Hi I'm Wendy and I am looking into hiring a nanny to care of my daughter in my home. I have no idea how to even go about the taxes as I do not even have a hired nanny yet, but I am trying to get an understanding of this prior to hiring someone.
Posted: April 19, 2013 at 4:27 PM
Stephanie Breedlove
Hi Kate! I'm so sorry to hear the family is pushing back so hard, but I applaud you for trying to do what is right. Aside from being required by law, paying household employer taxes benefits both you and the family in a number of ways. It gives you a tangible employment history and builds toward your eventual retirement while allowing the family to take tax breaks and avoid expensive IRS or state audits. I would suggest taking a look at the following article because it can really give you some perspective on how to handle the situation (http://www.care.com/child-care-4-ways-to-get-your-employer-to-pay-you-professionally-p1017-q20741249.html).

Also, feel free to have the family run a budget scenario using our nanny tax calculator (http://www.breedlove.com/Answers/EmployerBudget.aspx). They're going to find that their tax cost is very minimal and they may even save money by paying you on the books. Good luck Kate!
Posted: April 18, 2013 at 3:11 PM
Photo of Kate N.
Kate N.
I have received a job offer but they say they are unwilling to pay taxes. I would be earning about 16,000 a year. I don't wish to get into trouble for not paying but don't know what I would need to do to deal with this. Any suggestions?
Posted: April 18, 2013 at 12:20 PM
Stephanie Breedlove
OKC: The family is only required to withhold Social Security and Medicare taxes from your pay. Federal and state income taxes are not required to be withheld, but still must be paid and it is the responsibility of the employee to pay them. The $3,000 amount you owe is 12 months' worth of income taxes that could have been withheld from your pay if the family chose to withhold it. I would suggest talking with the family about having income taxes withheld moving forward so you don't run into this situation again. If they don't wish to withhold, you have the option of making estimated payments to the IRS four times per year via Form 1040-ES instead of all at once during tax time.

Amanda: Because you hit the $1,800 threshold, you should have Social Security and Medicare taxes withheld. Since the family is unwilling to pay taxes, the only way you can fulfill your obligation to report your income is by filing Form 4852 which is a substitute for a W-2. Just be aware that you will be responsible for the employee taxes the family never withheld from you and that filing this form can result in the family being audited because the government may want to know why your employer did not withhold taxes from your pay in 2012.
Posted: April 16, 2013 at 11:04 AM
Amanda
I am so confused about how to finagle taxes this year. I reported (on my 2012 return) the 1800$ I earned as a nanny as additional income (along with my other job through an agency). Now I'm learning about quarterly taxes, and have earned an additional $1800 or so at this same nanny job. What am I supposed to do? The family deducts the money they pay me from their dependent care flexible spending account and I have no idea how to file. Am I responsible? They are not willing to become employers and start paying taxes on me. I can't afford to get in trouble for this! What do I do?
Posted: April 15, 2013 at 8:13 PM
OKC K
I need some tax advice. First I'll start by saying, last year I filed an extension because I was so confused about my taxes. During that time, I quit working for one family and started working for another.

I forgot to file another extension and things were extremely busy with my new family so I just filed my 2011 taxes. The family I worked for during that time gave me a W-2 but didn't actually withhold any taxes. Now I am stuck owing the government close to $3,000. I read on here that they are responsible for that. Is there a way to inforce that or am I stuck footing the bill? When we discussed that at the beginning of my employment, they said they would be withholding so I was shocked when I got the W-2.

Since I filed late for 2011, I also have a ton of fees to pay on top of that and I had to be put on a payment plan but I read that once you're put on a payment plan, you can not be put on another one for another five years. Since I worked for this family part of 2012 as well, I am pretty sure I will owe again and I can not afford to pay that.

PLEASE HELP!!
Posted: April 15, 2013 at 2:55 PM
Stephanie Breedlove
Hi Joanna,
Because your nanny did not leave a forwarding address, you can attempt to get in touch with her to figure out where to send her W-2 next year or simply use the address she provided you during the hiring process. From a legal standpoint, as long as you are sending her W-2 to her last known address by January 31st, you are fulfilling your employer obligation. It's the responsibility of the employee to make sure his/her employer has up-to-date contact information.

I'm sorry to hear your relationship with your nanny ended on a negative note.
Posted: April 15, 2013 at 10:52 AM
Photo of Joanna K.
Joanna K.
Hi. I had a nanny. I hired her beginning of this year. We decided to let her go for lots of reasons. We paid her through a company to take out taxes. Since our schedule was erratic and often went over 40 hours a week, we paid the extra hours on the mutually agreed pay per week. We also allowed her to live in our house for free which included everything-- free TV/cable/utilities/gas/water/furniture/etc. We did not have her pay any of that. Then she had the chutzpah to ask for 150% pay on extra hours and we already paid her way above minimal wage and gave her free place to stay. We found that so unappreciative. anyhow, according to the law, she does not get 11/2 pay when she lives here. due to all the worries about the law, worries about taxes, and her lack of appreciation, we decided it would be so much easier to put our kids in preschool.
anyhow she left and never returned our house key, left her garbage here and some of her stuff. I paid the taxes on the extra hours too. She never left a forwarding address. what do i do about a w-2 end of year?
Posted: April 12, 2013 at 3:12 PM
Member Care.
Hi Jessica E!

Additionally, there is a nanny pay rate calculator on our site for you to use in determining the local pay rate for your area. I have included the link: http://www.care.com/nanny-pay
Posted: April 11, 2013 at 9:51 AM
Stephanie Breedlove
Hi Jessica! We have a budget calculator on our website (http://www.breedlove.com/Answers/EmployeePaycheck.aspx) that will break down all the taxes a nanny will have per year and per pay period. Since you are only concerned with income taxes, you will want to look at Federal Income Tax (FIT) and State Income Tax (SIT) when you run the calculation. Also, make sure you input the correct allowances for both your federal and state W-4 or the calculation will not be accurate.
Posted: April 10, 2013 at 10:49 AM
Photo of Jessica E.
Jessica E.
Is there a resource available to help a nanny figure out how much he/she should save for income taxes?
Posted: April 09, 2013 at 7:21 PM
Stephanie Breedlove
Hi Steph,

I'm really sorry to hear you didn't have taxes withheld last year. Believe it or not, I hear from nannies just like you every year. With very few exceptions, nannies are required to have Social Security and Medicare taxes withheld from their pay and should either pay or have federal and state income taxes withheld as well. And just like all other workers, nannies are required to report their income and pay the appropriate taxes. The good news is you have a couple of options at your disposal for getting this all straightened out:

1) You can talk with the family and ask for them to take care of their nanny tax obligations. They will need to catch up on paying the previous 4 quarters worth of employment taxes and issue you a W-2 so you can file your personal income tax return. Feel free to use our website, www.breedlove.com, as a resource for all the family's household employer tax requirements. It will also be a good opportunity for you to ask for an employment contract so you and the family can be on the same page moving forward. If the family agrees to this process, you will most likely need to apply for an extension on filing your personal income tax return as the catching-up process for the family will probably not be complete before April 15th. I would suggest asking for help from a tax preparer to make sure this is handled properly.

2) If the family is not willing to go through the process of becoming nanny tax compliant, you will have to file Form 4852 which substitutes for the W-2. By filing Form 4852, you fulfill your obligation of reporting your wages and paying the taxes that should have been withheld. Just be aware that filing this form can trigger an IRS audit for the family.

I hope you get everything worked out in a positive manner Steph!
Posted: April 04, 2013 at 3:42 PM
Steph
I was a nanny last year for most of the year. My boss told me she was taking money out of my check for taxes. Now she's stating she never did that. What can I do? I sadly didn't have it in writing and I'm trying to figure out how to do my taxes. I'm currently unsure of what I'm doing.
Posted: April 04, 2013 at 1:21 PM
Stephanie Breedlove
Hi Jessica! Congratulations on your marriage!

Most of the tax responsibility will fall to the family as they are the ones who will have to keep track of your payroll and file the appropriate household employment tax returns. But for your information, given what you will earn throughout the summer, you will definitely cross the $1,800 threshold for having to have Social Security and Medicare taxes withheld from your pay. I would recommend having federal (and probably state) income taxes withheld as well so you won't have to pay them all at once when you file your federal income tax return next year.

One thing you can do to help the family through the initial tax setup process is to fill out a federal W-4 form. This allows the family to figure out how much federal income tax to withhold each pay period. Make sure the family has your contact information too because even though you are only working during the summer, they will need to mail you a W-2 at the beginning of 2014 so you can accurately file your taxes.
Posted: April 02, 2013 at 2:46 PM
Photo of Jessica C.
Jessica C.
Hi, I need some tax advice. I have not filed taxes in the past because I have been listed as a dependent on my parents taxes because I am in college, and I was only working as a summer nanny making less than the amount required for me to file taxes. However, this summer I will be married. As a summer nanny making around $350-$400/week, what will my tax responsibilities be? Will I just file my personal income taxes and my employer will take care of the rest? What is my role in the tax situation?
Thank you!
Posted: April 02, 2013 at 10:13 AM
Stephanie Breedlove
Hi Julia,

You are correct that you are not required to file a personal income tax return. However, the family does need your SSN because they still have to file their household employer tax returns. Some of the forms they will file require them to list the names and Social Security numbers of any employees they had last year. This is actually good for you because you are getting credit for the Social Security and Medicare taxes withheld from your pay and establishing a traceable employment history.
Posted: March 27, 2013 at 11:49 AM
Photo of Julia B.
Julia B.
Hi, I need some tax advice. I have not had to file taxes in the past because I am still a dependent on my parents because I am in college. I was a nanny last summer and made $2,500. The family just contacted me this week asking for my SSN. I was paid a weekly rate of $400. Do I have to file taxes? My income was less than what the amount required for a dependent to files taxes ($5,950) so I was told I would not have to file my own income taxes, but I was still not sure if I had to pay taxes. Thanks, Julia
Posted: March 26, 2013 at 5:42 PM
Stephanie Breedlove
Hi April! I'm sorry you're having these difficulties so close to tax time. A nanny share allows 2 families to split the cost of employing a nanny, but in the eyes of the state and the IRS, both families are household employers and must pay the appropriate taxes. This means you should also receive a W-2 from BOTH families so you can file your personal income taxes. If you only file one W-2, not only are you not claiming half the wages you earned, you are not getting credit for the Social Security and Medicare contributions you make on half your income which impacts how the federal government will view your retirement benefits later in life.

As far as the mileage and cell phone goes, those are considered non-taxable compensation, so Family B does not have to worry about claiming those expenses. My suggestion is to sit down with Family B and explain to them that you are a household employee and need a W-2 to accurate file your taxes. Feel free to use our website, www.breedlove.com, as a resource because misclassifying a worker can result in a messy and expensive tax situation.
Posted: March 20, 2013 at 12:54 PM
Photo of April R.
April R.
This was my first year as a full-time nanny and I should have looked more into taxes but I figured I would just go in at the end of the year and say how much I made and they would have me pay in whatever I needed. However, I was looking at how to go about doing just that and discovered a few things. I'm in a nanny share and one family(A) who brings their child to the home of the other family (B). Family A has asked for my SSN, etc. (which I gave to them)after meeting with their tax preparer so I think they are doing it the above way. However, family B has not and said they don't need it. As far as I understand (and I could be wrong) they are using me as a business expense and have been. Which I see now is not the correct way. Are there any loopholes for this? I don't want to confront them trying to do my taxes the correct way and find out I'm out of place. My boss in family B has said that I can write off my mileage I drive to/from work as well as my cell phone since it's needed for communication and is an expense I have to be able to work. Is that accurate at all or are they treating it more like I'm an independent contractor? I love my job and don't want to stir anything up, but I also want to make sure I'm doing my taxes the right way so I don't have any trouble with that later. Any suggestions or advice is appreciated.
Posted: March 19, 2013 at 4:26 PM
Stephanie Breedlove
Hi Vinette,

The family you nanny for is responsible for filing and paying quarterly taxes, not you. Generally speaking, household employers pay state unemployment insurance taxes and state income taxes quarterly and make 1040 estimated payments to the IRS four times per year. To do this, the family needs to be registered as a household employer with the IRS and the state. There are other tax-related items the family should do throughout the year, so I would suggest having the family visit our website, www.breedlove.com. We have a compliance checklist that will be extremely helpful for them to see and please let them know we're available to answer any questions they have.
Posted: February 27, 2013 at 10:43 AM
Photo of Vinette T.
Vinette T.
I am a nanny, I go to my employers home to work. How do we go about taxes, and how do I pay them quarterly? Also, does my employer have to initiate the forms or do I? Thanks in advance!
Posted: February 26, 2013 at 9:25 PM
Stephanie Breedlove
Hi Lori!
Hope you had a great weekend! Since you were a household employer last year, the IRS does require you to report your nanny's income when you prepare your personal income taxes. You do this by attaching a Schedule H to your personal income tax return. The Schedule H reports to the IRS the Social Security, Medicare and federal unemployment insurance taxes you paid throughout the year as well as the Social Security, Medicare and federal income taxes you withheld from your nanny's pay. The W-4 your nanny fills out dictates how much in federal income taxes should be withheld every pay period based on the allowances she elects to take. You should also have your nanny's SSN on file because you need it in order to provide her with a W-2 so she can file her own personal income tax return.
Posted: February 11, 2013 at 11:51 AM
Photo of Lori K.
Lori K.
I paid a nanny through care.com for 6 months and did not obtain her SSN or file a W-4. Can I claim the money I paid her on my taxes?
Posted: February 07, 2013 at 4:43 PM
Stephanie Breedlove
Hi Ann and Delfina,

Thank you for your questions. I'll address Ann's first:

Ann, IRS Publication 926 (the publication which sets the tax code for household employers) states that families who pay a parent to care for their child do not have to pay Social Security, Medicare or Federal Unemployment Insurance taxes. That also means Social Security and Medicare taxes are not required to be withheld from your pay. However, some states still require state unemployment insurance taxes to be paid by a family, so an EIN would then be required to appropriately pay those quarterly taxes. Because I don't know what state you live, I can't 100% tell you that your daughter-in-law needs an EIN. As far as claiming the $5,000 goes, you can claim it as "other income" on your personal income tax return.

Delfina, in your situation, you are indeed considered a household employee and will need to report your wages. Throughout 2012, the family should have been withholding at least Social Security and Medicare taxes from your pay because you made more than $1,800. You should have also received a W-2 from them by January 31st. If you did not receive a W-2, you should ask for one, but if you don't get a W-2 from the family, your only recourse is to file your income tax return without it. You'll have to write in the total wages that should have been reported on that W-2 on line 7 of Form 1040 along with the letters "HSH" (code for household employment). This protects you because you've done what you're supposed to do as a taxpayer. However, your employer needs to know that this could trigger an audit for them.

Please feel free to have the family contact Breedlove & Associates because we can help get their tax situation straightened out if they did not set themselves up as a household employer, withhold federal and/or state taxes from your pay or pay federal and/or state employer taxes in 2012. There are also plenty of resources at www.breedlove.com if you need additional help.
Posted: February 06, 2013 at 10:48 AM
Delfina
I made about 3000 last year watching a kid. I watch him at his home. Does that mean his parents are my employers?How am I suppose to file taxes?
Posted: February 05, 2013 at 1:09 PM
ann
i nanny at my daughter-inlaws house and was paid 200 dollars a week, i made about 5,000 for the entire year do i need to claim that? did they need to have an EIN.
Posted: February 05, 2013 at 11:11 AM
Stephanie Breedlove
Hi Sunita,

My name is Stephanie Breedlove, founder and CEO of Care.com's payroll team at Breedlove & Associates. Because you earned less than $1,800 last year, you will not need to pay taxes on the income you received, nor will your son have to pay taxes on it.
Posted: February 01, 2013 at 3:24 PM
Sunita S.
My son and I share a home, I provided childcare for his five year old last year so he gave/paid me $750. I was disabled from an injury but had no other income. Will I have to pay tax on this income?
Posted: January 31, 2013 at 11:48 PM
Photo of Sarah C.
Sarah C.
Breedlove and associates is wonderful to use for maintaining your taxes. Have your employer set you up and you wont have to worry about taxes at the end of the year.
Posted: January 28, 2013 at 10:30 PM
meganr
I have been a nanny for 10 years and always have had my taxes done through my employers. I might need to change that in the nextr month, any other nannies out there do their own taxes?
Posted: January 03, 2013 at 7:15 PM
BroadusMom
I have been propositioned a Nanny job. However this would be my first. I worry about taxes.. As being the nanny I am lookin into what steps I would need to take and how to handle this???
Posted: December 19, 2012 at 7:33 PM
Photo of Michelle M.
Michelle M.
Tammy...
If care is provided in your own home then you are responsible for your own taxes. You are considered self employed. The parents can claim a child care tax deduction for what they pay you by providing your SS# or tax id #. You can also take deductions for having a home business (meals provided, partial utilities and cost of "part" of your house where you provide care). If you work at the other person's house on a regular basis and it is your primary job and they make the schedule and dictate how the job is done, then they have to pay half of your taxes and you pay the other half. (social security and FICA) You can have them withhold Federal and State taxes if you wish, or just pay it when you file. Typically it can be deducted from whatever your refund would be.
Posted: September 29, 2012 at 7:47 PM
Tammy L.
I take care of the children in my home as i also have my grandson to care for during the day. The woman whom i work for has 2 sons, this is my 1st job through care.com, who is responsible for withholding taxes and such? she thought it would be me since its at my home? can anyone tell me if this is right and what I need to do?
Posted: August 24, 2012 at 3:57 PM
Mindy J.
In your safety section it tells them outright not to give the SSN.
Posted: April 14, 2012 at 7:14 PM
Photo of Laura B.
Laura B.
Sorry, but what is "sen"?
Posted: April 11, 2012 at 11:41 AM
Erica L.
Your nanny should have supplied her SSN in the very beginning when she filled out the W-4 you provided her. If you are now trying to 1099 her, that is illegal.
Posted: February 07, 2012 at 4:10 PM
Photo of Lyndie F.
Lyndie F.
The nanny I hired refused to give me her sen as well! Any suggestions?
Posted: January 31, 2012 at 9:49 AM
Parul A.
My nanny who I hired thro' care.com refuses to give me her sen what can I do?
Posted: November 18, 2011 at 6:12 AM
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