Are you hiring a live-in nanny and wondering where to start figuring out your "nanny tax" obligations? HWS can help - we have counseled families just like yours for more than 20 years.
Your Live-in Nanny is Your Employee
A live-in nanny is a household employee - and never an independent contractor. The IRS is quite clear about this! You, therefore, are now a household employer. You need to address a few housekeeping items at the very begining of the employment arrangement.
Verification of Employment Eligibility:
Federal law requires ALL US employers to verify that ALL employees are legally authorized to work in the US. It does not matter if your live-in nanny was born in the United States or abroad, this applies to every one. It is also quite easy, simply have the live-in nanny complete form I-9 and review her identity documents per the form's instructions. Keep this document in your permanent paperwork.
Establish a Wage and Put It In Writing:
Your live in nanny is an hourly employee. She must be paid at no less than the prevailing minimum wage for every hour that she is on duty. Many families will agree to pay the live-in nanny a weekly rate. For your own protection, you must translate that into an hourly wage. HWS can help - we have a free Hourly Rate Calculator which will translate your weekly wage into government-required hourly rate terms. Note that while your live-in nanny must be paid for every hour of work, in most states an overtime premium is not required. Make sure you know the regulations in your state! Also note that a formal Pay Rate Notice must be provided to your live-in nanny in most jurisdictions.
Before you invite a stranger to live in your home and care for your precious children, make sure you do your due dilligence i background screening! A nanny background screening report doesn't tell you everything you need to know - learn more.
Most live in nannies are protected by tennancy laws unless you establish up front that this is an employment situation and that room and board are a benefit and condition of employment, a benefit that terminates when the employment terminates. Avoid a "Nightmare Nanny" scenario!