Make sure you don’t overlook the nanny tax as you are reviewing your filing requirements for 2018. You could be liable to pay state and federal payroll taxes if you have a housekeeper or other household employee.
How do you know if you must pay the nanny tax?
A household employee is generally someone you hire to work in or around your home. For example, a babysitter, nurse or gardener would be considered a household employee. They might work part-time or full-time and it doesn’t matter whether you pay them by the job, hourly or weekly.
Keep in mind, someone is not necessarily your employee just because they do work around your house. A lawn service, for example, may send someone to cut your grass each week. That person would be an employee of the lawn service.
Generally, workers are not your household employee if they bring their own tools, do work for multiple customers and/or control when and how they do the work.
What are your responsibilities?
You will generally be responsible for 2017 payroll taxes if you have a household employee and if you paid that individual more than $2,000. If you pay more than $1,000 in any quarter, federal unemployment tax kicks in as well.
Don’t hesitate to contact our office if you are uncertain whether or not you have a household employee or if you have additional questions about the nanny tax.
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