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The 2019 household employment changes every family should prepare for

Erik Johnson
Dec. 13, 2018

If you have a nanny watching your kids or a senior caregiver taking care of a loved one, you know there’s a lot to keep track of, whether it’s juggling schedules or managing payroll. To make things more complicated, new laws and regulations mean that every year, there’s always a handful of things that can change the way you handle payroll, taxes or the benefits that your caregiver receives.

2019 will be no different, but the good news is that this year there won’t be many big changes. Here’s what you need to know for the new year.

The threshold for having payroll and tax responsibilities will stay at $2,100

Just like in 2018, if you have a household employee that earns at least $2,100 during the calendar year, the IRS says you’ll need to take care of a few payroll and tax responsibilities.

This is important to keep in mind in case you hire short-term care, such as a summer nanny, or if your parent needs temporary senior care if they unfortunately become sick or injured. If you do end up crossing the $2,100 threshold, you can use this tax filing timeline to keep yourself organized throughout the year.

Minimum wage increases in 14 states, 4 counties and 18 cities

The federal minimum wage of $7.25 per hour has not increased since 2009, but states, cities and counties can pass legislation to increase it locally. If you live in an area where multiple minimum wage laws are in effect, you must pay your caregiver the highest rate.

Beginning Jan. 1, if you live in the following places, make sure your caregiver is earning at least the new minimum wage per hour:

  • Arizona - $11

    • Flagstaff - $12

  • California - $11

    • Belmont - $13.50

    • Cupertino - $15

    • El Cerrito - $15

    • Los Altos - $15

    • Mountain View - $15.65

    • Oakland - $13.80

    • Palo Alto - $15

    • Richmond - $15

    • San Diego - $12

    • San Jose - $15

    • San Mateo - $15

    • Santa Clara - $15

    • Sunnyvale - $15.65

  • Colorado - $11.10

  • Florida - $8.46

  • Maine - $11

  • Massachusetts - $12

  • Michigan - $9.45

  • Minnesota - $8.04

  • Montana - $8.50

  • New Jersey - $8.85

  • New Mexico - no change

    • Albuquerque, NM - $9.20

    • Bernalillo County, NM - $9.05

  • New York - $11.10

    • New York City, NY - $13.50

    • Nassau County, NY - $12

    • Suffolk County, NY - $12

    • Westchester County, NY - $12

  • South Dakota - $9.10

  • Vermont - $10.78

  • Washington - $12

    • Seattle - $15

    • Tacoma - $12.35

There is no longer a fine for not having health insurance

The recent Tax Cuts and Jobs Act will remove the penalty for not being insured that existed in the Affordable Care Act. However, the requirement for having a health insurance policy has not changed so technically you — and your caregiver — still need to be covered.

Regardless of the law, it’s still a good idea to have health insurance because one serious accident or illness can cripple you financially if you’re not covered. If you missed the Open Enrollment deadline of Dec. 15, there are certain life-changing events (moving to a new state, having a baby, getting married) that will give you a 60-day window to purchase health insurance.

Limits for parking and mass transit reimbursement increase

Some families like to include reimbursement for mass transit services (buses, light rail, etc.) and parking as part of their caregiver’s payroll. This is because it’s less expensive than having your caregiver pay for it out of their own pocket. The reason is because these benefits are not considered taxable income — meaning neither you nor your caregiver will owe taxes on the amount of parking and/or mass transit expense that are agreed upon.

For 2019, the maximum benefit is $265 per month (up from $260 per month), however, if you live in Massachusetts, parking reimbursement is capped at $140 per month.

These are just the changes that take effect at the beginning of 2019. If you ever want to know what’s required for hiring a caregiver in your state, you can always reference this state-by-state guide to answer your questions.

Read next: Employment benefits to consider offering nannies

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