December 21, 2012 3:47 PM

San Jose’s Measure D, which will increase the current city’s minimum wage from $8 to $10 per hour effective March 2013, passed with overwhelming voter support. 

San Jose is now one of the two cities in California whose minimum wage has gone up independently of the state's.  San Francisco has enforced its own minimum wage for many years.  There are only a handful of other cities nationwide that set their own minimum wages: Washington, D.C., Santa Fe and Albuquerque, N.M.

Household employers in San Jose whose pay their employees minimum wage need to adjust their salary to reflect this new rate in March 2013.

Stay tuned for more updates from The Nanny Tax Experts.

IRS and states recently affected by Hurricane Sandy will extend tax deadlines and waive some penalties to tax payers affected by this natural disaster.

Tax Commissioner Craig M. Burns has announced that Virginia will provide a penalty waiver to those individuals and businesses affected by Hurricane Sandy. This penalty waiver applies to any late returns filed or payments made by affected taxpayers between October 29, 2012 and November 9, 2012. To notify the Department of Taxation that you were affected by Hurricane Sandy, you must write “Hurricane Sandy” at the top of your return. The Department of Taxation will then abate any late-filing or late-payment penalties that would otherwise apply.

To qualify for this penalty waiver, taxpayers must be unable to meet their filing obligations because the financial books and records they need to file their taxes are unavailable because of hurricane damage or power outage.

Many employees are not aware of what is being deducted from their paycheck. Household employees in particular (nannies, housekeepers, elder caregivers etc.) often are paid by personal check, do not have a pay stub, and work with families who themselves are not familiar with payroll and employment taxes.

Kentucky Tax Amnesty

If you are a Kentucky resident and have unpaid state taxes, penalties, fees and interests … we may have good news for you!

The Kentucky Department of Revenue has put in place a Tax Amnesty Program.  Tax payers with past due bills from December 1, 2001 to October 1, 2011 have the opportunity to clear their delinquencies and start over with the department. 

From October 1st 2012 to November 30th 2012, you can apply for Tax Amnesty from the Kentucky Department of Revenue.   Your situation will be evaluated and if you qualify, you will only owe the past due taxes and half of the interest on your bill.  Any penalties and half of your interest will be waived. 

This isa one time only program for Kentucky; don’t let this opportunity slipthrough your fingers.  This program is open for Household Employers as well. There is no second chance, after the November 30th deadline, you will not only be unable to apply, but penalties, fees and interest will also increase. 

For more information, visit the KY website: http://www.amnesty.ky.gov/

Rhode Island kicks off tax amnesty program.  If you are a Rhode Island tax payer and are delinquent on any states taxes, you will soon have an opportunity to come current on your taxes without having to pay any penalties.  The Rhode Island Department of Taxation announced the amnesty program in its most recent newsletter, joining a handful of states offering amnesty to individuals and/ or businesses.

The Form 1040 Schedule H is the vehicle that household employers use to report wages paid and employment taxes due for household workers. This form is a bit more complex for 2011 due to 2 significant events.

IRS data places "nanny tax" compliance (declaration by families of their household payroll) at about 20%. Household employment experts believe even this number is optimistic.  Looking at these statistics, a new household employer has to think that just ignoring this complicated and expensive issue is relatively risk free. What these numbers don't illustrate is the steadily increasing political pressure on the IRS to collect revenue, and the relatively low hanging fruit the "nanny taxes" present. Add to this the very real possibility that the elder care giver or nanny may file for unemployment benefits when the job ends, and the risk evaluation changes dramatically.

Monday December 19, 2011 Update: What appeared a certainty two days ago is suddenly in jeopardy today. The House of Representatives is poised to reject the Senate's 2 month extension of the payroll tax holiday - insisting on a bill that funds the extension for a full year. We are watching this...