It's simple enough to overlook this tax related to household
employees. But you could be in trouble if you do. Here's why you'd better pay
attention to the nanny tax.
As you review your filing requirements for 2018, make sure you don't overlook the nanny tax related to household employees. If you have a housekeeper or any other household employee, you could be liable to pay state and federal payroll taxes.
As you review your filing requirements for 2018, make sure you don't overlook the nanny tax related to household employees. If you have a housekeeper or any other household employee, you could be liable to pay state and federal payroll taxes.
How
to know if you must pay the nanny tax
First, you'll need to determine whether you have a household
employee. Generally, this is someone you hire to work in or around your house.
It could be a babysitter, nurse, gardener, etc. It doesn't matter whether they
work part-time or full-time, or whether you pay them hourly, weekly, or by the
job.
But not everyone who works around your house is an employee. For
example, if a lawn service sends someone to cut your grass each week, that
person is not your employee.
As a general rule, workers who bring their own tools, do work
for multiple customers and/or control when and how they do the work are not
your household employees.
Your
responsibilities
If you have a household employee, you'll generally be
responsible for 2017 payroll taxes if you paid that individual more than $2,000
last year. However, federal unemployment tax kicks in if you pay more than
$1,000 to all domestic employees in any quarter.
It's not always easy to tell whether you have a household
employee, or whether exceptions apply. If in doubt, don't hesitate to call our
office at (518) 798-3330.
