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The "Nanny Taxes" Explained by HomeWork Solutions

Posted by HomeWork Solutions on 9/19/13 3:12 PM
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Our demanding careers and busy lives sometimes leads us to hire someone to help us out around the house.  If you have hired a nanny, housekeeper, elder caregiver, personal assistant, or any other person to provide services in your home you might become a household employer.  What does it mean?

nanny taxesThe Internal Revenue Service requires payroll tax filings by a household employer who pays a household employee more than $1800 cash wages in calendar year 2013 (in 2014 this threshold increased to $1900). The requirement for state employment tax filings is different, and is determined by wages paid in a calendar quarter.

These household payroll taxes are collectively referred to as "nanny taxes", although as a practical matter these employment taxes are applied to all US employees.

Nanny Tax Video Tutorial (100 SECONDS)

The employer's nanny payroll tax obligations may include:

  • Social Security & Medicare Taxes
  • Federal Unemployment Tax
  • State unemployment and disability insurance taxes levied on the employer

Your household employee contributes to or pays:

  • Social Security & Medicare Taxes
  • Employee Disability/Unemployment Taxes where required
  • Federal/State Income Taxes

The EMPLOYER is solely responsible for the remittance of the Social Security and Medicare taxes.

Receive Guide: Avoid Common  Nanny Payroll Mistakes

Questions?  Please give us a call at 800.626.4829.  We will be delighted to assist you!

Topics: nanny tax, household payroll tax, nanny tax compliance

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