Year-End Nanny Tax Checklist for Household Employers

Follow this year-end checklist for household employers to make sure you have everything covered before tax season.

Human Resources

• Verify home addresses for all employees.
• Reconcile all vacation, sick, and paid time off (PTO) balances for year-end payout or carryover.
• Although you may be exempt from FICA reporting, you may still be required to remit unemployment taxes if you paid a total of $1,000 or more in a calendar quarter. Some states may have an even lower threshold.

Payroll

• Send a reminder to your employee to verify their Social Security Number and address on their pay stubs.
• Account for any and all bonuses as well as cash and non-cash (ex: gift cards) gifts as they should be reported as taxable income. The IRS counts these as taxable gifts between the employer and employee.
• Review taxable fringe benefits that must be posted into payroll for W-2 reporting. Capture all information such as relocation and bonuses.
• Check third-party sick pay (short- or long-term disability) postings to make sure you have captured all information required.

Taxes

• Provide your employee with Form W-2 by January 31.
• Submit a copy of Form W-2 and Form W-3 to the Social Security Administration by January 31.
• Attach Schedule H to your personal tax return when you file.

Benefits

• Distribute new health and/or dental insurance cards.
• Verify Flexible Spending Account (FSA) balances to confirm that employees will have their total amounts deducted by the end of the calendar year.

Monitor Changes to Tax and Wage Laws

• Check Social Security’s maximum taxable wage. For 2024, the maximum amount of taxable earnings is $168,600 (in 2023 the amount was $160,200).
• Check for a minimum wage increase in your state for 2024 and plan accordingly.
• Check the employment coverage threshold for domestic employees (commonly called the nanny tax threshold). If your nanny will make $2,700 or more in 2024 (or made $2,600 in 2023), then you will need to withhold and remit FICA taxes (Social Security and Medicare).

Legal Disclaimer: This Year-End Nanny Tax Checklist for Household Employers is intended for informational purposes only, and does not constitute legal information or advice.

We’re here to help with year-end nanny tax tasks. Feel free to call us at (800) 929-9213 or email [email protected] with your questions about your payroll, tax, and wage responsibilities.

Also, download The Complete Guide to Household Payroll. It will help you every step of the way and explain everything you need to do. There’s even a handy checklist and payroll calendar at the end of the guide to use as references.