Many families (and agencies) use nanny work agreements that cover a specific period of time, generally one year. This is NOT a good idea. In a complicated United States District Court, D. Oregon case, the court affirmed that nannies are indeed non-exempt employees and are entitled to hourly pay and overtime pay for hours worked in excess of 40 in a work week.  

Topics: nanny employee, nanny non-exempt employee

Attention nanny employers! Please make sure you recalculate your nanny's payroll deductions prior to issuing the first 2011 payroll. There have been changes to the Social Security tax rate, the Federal income tax rates, and many state income tax rates.

Topics: nanny payroll tax, calculate nanny payroll tax, new york household employment, nanny social security tax rate

There is an excellent article on the Washington State Workers Compensation Insurance Blog that outlines the dangers of not paying the nanny taxes, and the potential benefits to the employer for nanny tax compliance. Quoted is one of HomeWork Solutions' favorite go-to industry experts, attorney Bob King of Legally Nanny.

Topics: nanny workers compensation insurance, nanny tax, nanny tax compliance

Several pieces of federal legislation from 2010 will impact household employers and the payroll taxes (also known as Nanny Taxes) the household employer deducts from a nanny's pay check.

Topics: nanny social security tax 2011, nanny payroll tax, nanny tax

G-5 domestics who are in the United States less than 183 days in their first year working in the US are considered non-resident aliens for Federal income tax purposes and will file a Form 1040NR for the first year of employment.

Topics: G5 domestic, GV domestic, G-5 non-resident alien

Nannies and senior home-care workers are not independent contractors.

 “Most workers [who are classified as independent contractors] are employees under the FLSA’s broad definitions.” ~ David Weil, Administrator, US Department of Labor Wage and Hour

 

Nannies and senior home caregivers are almost always employees of the hiring family, yet every year thousands of families classify their nanny or senior caregiver as an "independent contractor" and fail to pay the employment taxes and unemployment taxes on the wage they pay their family's nanny.The IRS estimates that fewer than one in five famlies with a household employee comply with the payroll, tax, and reporting requirements in the tax code. Industry experts place the compliance rate much lower than 20%, and have calculated a $3 BILLION dollar per year tax gap - the taxes owed but not collected on household senior homecare and nanny employment.

Topics: worker misclassification independent contractor, nanny employee, nanny independent contractor

The mileage reimbursement rate typically used to reimburse a nanny for using her personal vehicle to transport her charges to and from school, appointments, activities, etc. has increased one cent in 2011 to $0.51 per mile.

Topics: nanny employment practices, nanny mileage reimbursement, nanny car allowance

Topics: nanny income tax

 

The Department of Homeland Security's Citizenship and Immigration Services will launch an individual self-check capability in the E-Verify program in 2010. This will allow workers to verify their own work authorization status before they apply for a job. E-Verify is the federal government's mostly voluntary electronic employment verification program. E-Verify will confirm I-9 data provided to the employer by matching information to government databases.

E-Verify currently allows employees who cannot be electronically verified 8 business days to appeal/correct the information and continue working. "Tentative nonconfirmations in the E-Verify program may be difficult for an employee to address in the eight business days" allotted under the program, said Alejandro Mayorkas, CIS director. With a self-check option, workers could correct errors before they apply for a job and without the eight-day constraint, he said.

HomeWork Solutions, the nation's leading preparer of nanny payroll and provider of nanny tax compliance services, began offering E-Verify to clients in the summer of 2008. Clients who verify their employees employment via E-Verify are provided "safe harbor" - immunity for any government penalties - in the event the employee is later deemed ineligible for employment in the US.

 

E-Verify Self Check Link

Topics: nanny e-verify

In today's economy nannies are finding that good jobs take longer to secure. The household who let's their off-the-books nanny go, for whatever reason, should be seriously concerned about their former nanny filing an unemployment claim. The nanny who was perfectly content to receive tax fee income experiences a reality check when they have no income for weeks, or months. Suddenly, filing an unemployment claim seems the only option to avoid eviction or to put food on the table. Once that claim has been filed, the whistle is blown on the former household employer. Since state unemployment systems share this information with the IRS, everyone is on notice that the family employed the nanny and that there are no tax returns on file.

Topics: nanny tax audit