If you answered yes to both of these questions, PLEASE recalculate her paycheck deductions using the 2010 rates ASAP.
For a married nanny earning $18,000 a year, her Federal income tax withholding could have doubled. If she earns $22,000 it could go up by a third!
Why?
2009 post-stimulus rates spread the "Making Work Pay" tax credit across only 9 months - April through December. This year the tables spread it across the full calendar year. This impacts ALL wage earners, not just the married ones.
Married wage earners are impacted even more with the new tables, as they correct assumptions the IRS made in 2009 that could cause many married couples to have had too little tax taken out in 2009 - an unpleasant surprise at tax time!
The HomeWork Solutions' online nanny tax calculators are updated for these new 2010 rates. Clients making a net pay adjustment, please don't forget to inform the office staff!