Goldburd | Goldburd McCone LLP

For nationwide tax guidance, call:
212-302-9400 or toll-free at 844-653-2873.

Goldburd | Goldburd McCone LLP

For nationwide tax guidance, call: 212-302-9400 or toll-free at 844-653-2873.

Serving Individual And Corporate Tax Clients Nationwide From Our New York, New Jersey, Florida And California Offices

Steven Goldburd and Benjamin A Goldburd

Since 1983, our tax firm has skillfully represented individuals and corporations across the United States and around the globe from our offices in New York, New Jersey, California and Florida.

Do I need to pay taxes for my nanny?

On Behalf of | May 23, 2024 | Tax Strategies

Hiring a nanny to care for your children is a significant decision that not only affects your family dynamics but also your tax responsibilities. The key as to how this impacts your tax responsibilities is often whether the nanny is a household employee or not.

What is a household employee?

The Internal Revenue Service (IRS) considers a nanny a household employee if you control not only the work done but also how it is done. If you have a nanny who fits this description, you are likely responsible for tax obligations that can include:

  • Paying Social Security and Medicare taxes, and
  • Withholding and paying federal and state income taxes, if agreed upon.

In these situations, you will likely need to obtain an Employer Identification Number (EIN) from the IRS and have your nanny fill out Form I-9 and Form W-4.

How do I report and pay these taxes?

Paying taxes for your nanny involves a few steps. These generally include:

  • File Schedule H with your federal tax return to report nanny taxes if you pay your nanny more than the threshold set by the IRS,
  • Provide your nanny with Form W-2 to report their annual wages and taxes withheld, and
  • File Form W-2 with the Social Security Administration.

By adhering to tax laws, you provide protection for both yourself and your nanny. This helps to better ensure your nanny’s eligibility for Social Security and Medicare benefits and helps you to avoid potential IRS penalties for a failure to meet your tax obligations.

Employing a nanny comes with the obligation to handle taxes responsibly. Failure to comply with these requirements can result in penalties and a loss of benefits for your nanny. The attorneys at Goldburd McCone are familiar with these matters and can help to better ensure you understand and meet your tax obligations to maintain a professional and legal relationship with your household employee and mitigate the risk of allegations of wrongdoing.