All states and unemployment (sometimes called workforce or labor) departments have websites where you can do this online. State Identification Numbers : You typically will need to register with your state revenue and/or unemployment department.
Household employers are not required to withhold federal income tax from an employee’s pay, but may do so if both the employer and employee agree. Be sure to select the option to register as a household employer otherwise you may be registered as a business employer.įorm W-4 : Also known as Employee’s Withholding Allowance Certificate, your employee completes this form to provide you the filing status and other criteria you need to determine the correct amount of income tax to withhold from each pay. You can also apply for an EIN online, and get one within minutes. It gives you a specific tax number for dealing with the IRS and other relevant agencies. New household employers have a few forms they need to get and complete to get started:įorm SS-4 : This is an application for Employer Identification Number (EIN) which must be filed by all household employers. You will use Schedule H to add your share of the FICA taxes to your total tax obligation, as well as to calculate the FUTA tax you owe. You withhold these taxes from your employee’s wages during the year, and then match that amount when remitting these taxes to the IRS by April 15 of the following year, typically by completing a Schedule H and filing it along with your personal Form 1040. Your employee’s share of FICA taxes is 6.2% of gross wages for social security, and 1.45% for Medicare. Only you as the employer will pay FUTA, but both you and your employee share the social security and Medicare taxes (sometimes collectively called FICA) equally. If you have a household employee and paid them more than $2,400* last year, federal law requires you to withhold and pay social security and Medicare taxes on your employee’s wages, and pay federal unemployment tax (FUTA) as well. That’s because you as the employer control: Do I Owe the Nanny Tax?Īccording to the law, if a person works as a nanny in your home, that person is your household employee – not an independent contractor – no matter what you call them.
#Does nannypay calculate futa taxes plus#
In long run, if you fail to pay your nanny legally, and get caught, it can cost you an average of $25,000 in fines and interest plus the taxes you owe. Although some nannies may even ask to be paid “under the table”, a family that agrees to such an arrangement is taking significant legal and financial risks. Although household employment tax laws certainly add an additional expense to your childcare budget, you really can’t afford not to comply with the law. Tax season is here! In this article, you’ll find a quick checklist of things you need to know about about filing your nanny taxes the right way.įirst, let’s be frank.
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