FAQs: Nannies and Household Employees
Is a nanny an employee?
Answer – YES! ABSOLUTELY! You are considered to be an employee when you work on a regular basis for a family, at their home and expect to earn more than $2,200 in 2020 (or earned at least $2,100 in 2019). The IRS and the state you work in consider you a household employee. There are only slight differences between being a household employee and an employee working in an office, retail store, or a restaurant, but basically both types of employees are treated the same way tax-wise.
What does being an employee actually mean?
Will I bring home less money each week because I will be paying taxes?
How much would I lose to taxes each week?
Do I have to have income taxes withheld?
Are there any benefits of being paid professionally?
What if the family I work for doesn't want to pay nanny taxes?
- It protects them in case you ever get hurt on the job
- They will be able to take advantage of their flexible-spending plan and deduct your salary as a qualifying expense
- Your employer has to report your wages and the taxes they withheld for you on their personal income tax return. The IRS figures to catch a lot of people who forget to tell them about their nannies
- Not paying you properly cheats you out of any credits to your Social Security account, impedes your ability to obtain credit, and will not protect you if you become unemployed
- Because it’s the law!