How to Avoid Heather Nauert’s Nanny Tax Issues and Protect Your Career

Feb 18, 2019 | Hiring an Employee, Household Payroll & Taxes

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State Department spokeswoman Heather Nauert has withdrawn from consideration as U.N. Ambassador. News outlets are reporting that she employed a nanny who was in the U.S. legally but was not legally allowed to work. The nanny wasn’t paying taxes, which means Nauert was paying her employee off the books. Even though Nauert disclosed her nanny issues and paid back taxes, it wasn’t enough to save her nomination. She is also not expected to return to her State Department job.

Nauert joins a long list of political nominees who have been derailed by nanny tax issues. But paying nanny taxes is not just for government employees and political nominees. If you’re being considered for partner in your firm or a C-level position in a major corporation, problems with household employment can wipe out an opportunity of a lifetime and undo all of the hard work you’ve put into your career to get to that point.

Don’t let this happen to you. Let’s look at two issues that tripped up Nauert and wrecked her nomination.

Hiring an Unauthorized Worker

It’s important to understand a couple of seemingly contradictory factors.

1. You can legally hire a non-citizen to work for you as long as they are authorized to work in the U.S.

These employees typically include legal permanent residents like green card holders and other aliens such as refugees, asylees, and persons in Temporary Protected Status.

2. Not all people in the U.S. legally are allowed to work in the country.

Non-immigrants are aliens who may have already been admitted into the country for a specific purpose for a temporary period of time. They may not be authorized to work in the U.S. depending on the type of visa they hold. Hiring a non-immigrant alien can be a long and complex process.

As a household employer, you’re responsible for verifying the identity and work authorization eligibility of anyone you plan to hire. Your potential employee should complete Form I-9 no later than the first day of employment and produce proof of employment eligibility within three days after they begin work. Failing to properly complete or retain Form I-9 can result in penalties of hundreds to thousands of dollars.

Failing to Pay Nanny Taxes

When you hire an employee to work in your home, you are responsible for a number of taxes and must comply with tax, wage, and labor laws that pertain to household employment. These are commonly referred to as “nanny taxes.” You’ll need to pay Social Security and Medicare taxes (and withhold these taxes from your employee’s pay) and federal and state unemployment taxes. Withholding income taxes is not required but recommended. On top of taxes, you may be responsible for purchasing workers’ compensation insurance coverage and complying with paid family or sick leave laws.

Our Complete Nanny Tax Guide will help you become compliant.

If you’ve had a household employee like a nanny, housekeeper or senior caregiver, and haven’t been paying your nanny taxes, get caught up and pay your back taxes as soon as possible. Significant fines and penalties can result from non-compliance especially if you’ve neglected workers’ compensation insurance.

GTM Can Help

Get peace of mind and call GTM Payroll Services at (800) 929-9213 for a free, no-obligation consultation. Our household employment experts will answer your questions about hiring a household employee and can get you set up as an employer and paying your employee the right way.

If you already employ a worker in your home and need to get compliant, we can also handle your back taxes.