There are a number of anticipated changes to nanny and other household payroll as we move into 2012 - and some unknowns at this time.
- New payroll tax withholding calculations should be done for all current household employees prior to issuing 2012 payroll, as there are expected changes to the Social Security** tax rate for 2012. Federal Income Tax and many state income tax rates are also adjusted annually. The 4nannytaxes.com Nanny Tax Calculator will be updated for 2012 tax rates and be available to our clients and non-clients alike. This is an excellent time to remind employees to review their income tax withholding status and to submit a new Form W-4 should they wish to change their withholding for 2012.
- Forms W-2 for 2011 are due to all household employees who earned $1700 or more in 2011 no later than January 31, 2012.
- The threshold that obligates a household employer to report and pay the "Nanny Taxes" increases to $1800 for 2012. Any employee who earns $1800 or more in 2012 will be entitled to a Form W-2 in January 2013.
New York household employers are reminded of their obligations under the NYS Wage Theft Prevention Act, as well as 2010's NYS Domestic Employee's Bill of Rights.
** The Obama Administration is placing considerable pressure on the Congress to extend the Payroll Tax Cut, currently expiring December 31, 2011, into 2012. At this time we are working on the assumption it will expire, and employee rates will return to 7.65%. Should this change, we will make prompt adjustments to our calculator tools.
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