Nanny Tax Info

Written by Amy Hall
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Nanny tax info can be a sticky subject, mainly because families don't know what is required of them, and nannies may not want taxes withheld. Up until about 1994, the consensus on taxes for nannies was not clear at all. Congress revised "nanny taxes" in 1994, basically stating that employers must disclose wages paid to all domestic help in their home, on their personal income tax returns.

Most nanny agencies will be able to help you with nanny tax info when you begin the process of hiring a nanny to care for your children. While these agencies do not take care of the taxes for you, they can often refer you to companies that specialize in taxes for domestic help. Let's take a look at some of the general guidelines concerning nanny taxes.

Understanding Nanny Tax Info

If you have a nanny working in your home, the IRS will generally require that you file payroll taxes if you pay more than $1400 in a calendar year. Obviously, if you have a full-time nanny you will exceed this limit and have to pay taxes on your nanny's wages. You will have to pay social security and medicare taxes, which are roughly 15.3 percent of gross wages (7.65 percent you fund, the other 7.65 percent you deduct (withhold) from the nanny), federal unemployment tax, state unemployment and disability insurance taxes, and advance payment of the earned income credit for eligible employees.

This is basic nanny tax info that may differ slightly from state to state. It's always a good idea to check with a tax preparation office that handles taxes for domestic workers, such as nannies. When in doubt, it is better to check in advance than get socked with an unexpected tax bill, or have your nanny get stuck with a tax bill that she can't pay.


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