Do you have a aging loved one who may need senior care while you go to work every day? Are you feeling overwhelmed with your caregiving responsibilities?
More families are considering the possibility of privately hiring senior home care for someone it their family as a way to help their loved ones age in place in a safe and happy environment. This is uncharted territory for most people, and adult children who may have hired nannies to care for their children years ago wonder what they need to consider when hiring senior home care assistance.
Confused about how nanny taxes affect the taxes you pay on your housekeeper’s wages? In honor every mom who appeciates extra help keeping the home in order, we thought we’d clear up some common misconceptions surrounding an employer’s tax obligations on their housekeeper’s wages.
Generally, in life, it pays to do things right the first time. Your nanny payroll taxes are no exception to the rule: while it may be tempting to evade these pesky taxes, in the long run, you will be thankful that you managed your household employment taxes well. It will cost much more of your money, time, and patience to deal with the consequences of tax fraud than to file your payroll taxes correctly the first time around!
On April 1, 2015, Massachusetts will become the fourth state (after NY, CA and HI) to enact a Domestic Worker Bill of Rights (DWBR) that expands employment protections to domestic workers. All Massachusetts families who employ a nanny, senior caregiver, housekeeper or other “domestic service worker” will have new legal obligations. While many of the DWBR provisions simply reiterate that household employees are covered by existing state and federal law, the DWBR creates a number of new rights for household employees —and obligations for household employers. The DWBR specifies household employer —such recordkeeping and notice requirements, as well as limitations on when and how a live-in domestic worker may be terminated. The DWBR applies to all full time and part time household employees.
Who is Covered by the Massachusetts DWBR?
The DWBR applies to all families who employ a live in or live out, full time or part time domestic service worker. Domestic service workers includes nannies, senior caregivers, housekeepers, maids and other domestic workers who work in a private home and provide caregiving, housekeeping, household management, maid, and meal preparation services. . The law does not apply to any licensed or registered staffing, employment or placement agencies. "Domestic workers" are individuals who are paid to perform work of a domestic nature within a household, such as housekeeping, house cleaning, home management, nanny services, laundering, cooking, home companion services, and caretaking of individuals.
Every American dreads this date. APRIL 15th! We see images of adding machine tape, lines at the post office, and piles of tax receipts. January is the month household employers deliver W-2 forms to their nanny, housekeeper and other household employees. After a month of frantic phone calls from employers and caregivers alike pleading for tax help, I can offer the following reflections:
Part Time Nannies, Summer Nannies
MYTH “My nanny only works during the summer months when our kids are out of school. I don’t need to worry about nanny taxes since she is only a temporary employee.”
It's been called the Silver Tsunami - America's 65+ demographic, which currently accounts for 13 percent of the overall population, is expected account for more than 20 percent by 2050 according to the U.S. Census Bureau. Three quarters of that population strong prefers and expects to age in place, remaining in their homes and communities as long as possible. Many families turn to senior caregivers to help their loved ones remain independent in a safe environment, especially when non-medical support is called for.
Once the caregiver is hired, questions remain about how to handle the senior caregiver's payroll. Families turn to senior care referral agencies, accountants and geriatric care managers for guidance. HWS has heard some remarkably bad advice on senior caregiver payroll, advice that when followed often comes back to haunt the senior or their family members.
Topics: nanny w-2 form
There is a lot of confusion and some contradictory guidance regarding whether nanny and other household employers can continue to provide reimbursement of the household employee's individual health insurance premium on a tax free basis and exclude the reimbursement from the nanny's W-2 form.