It’s that time of year again – tax season! Many household employers may have questions regarding W-2s for household employees. Please see the answers below to some of the most commonly asked questions.
Q: Does my nanny receive a 1099 form?
A: No. Household employees, in most cases, are not independent contractors. They receive W-2 forms. View more information on this topic.
Q: What is the deadline for giving the W-2 to my nanny?
A: The W-2 form needs to be postmarked by February 1st, 2016.
Q: I paid my nanny directly for the first 4 months of the year. Are those wages included on the W-2?
A: Yes. You should include all wages (on your own or with the assistance of GTM or other payroll provider) on one W-2 and not more than one.
Q: My nanny was paid a net amount. Why are the wages on the W-2 higher than what I paid her?
A: The W-2 form reports Gross wages paid to an employee, not net. Even if you negotiated and agreed upon paying a net wage, your employee’s Social Security, Medicare, and possibly Federal and State income taxes are added on top of the net in order to calculate the Gross wages that are reported as their income. Read more about Gross vs. Net calculations.
Q: When do I have to file the W-2 and W-3 with the Social Security administration?
A: If you have a payroll provider, you should first check with them to see if they are doing this on your behalf. If you have to do it on your own, the deadline for submitting the forms electronically is March 31, 2016. If filing a paper form, the deadline is February 29, 2016.
Q: What do I do with the Schedule H form?
A. This form is included with your personal income tax return. You should provide a copy to your accountant, or you should include the information if filing your own return.
Q: What is reported on a Schedule H form?
A. A Schedule H form reports total gross wages, your employee’s portion, and your employer portion of Social Security and Medicare taxes, your federal unemployment tax, and contributions made to your state for unemployment insurance.
Q: My nanny was on disability for a few months. Are those wages included in the W-2 form?
A: Yes. The disability company should have provided a report of your employees’ income that was paid out to him/her. You should provide this report to your payroll provider to be included in your employee’s W-2 wages.
Please contact GTM Payroll Services at (800) 929-9213 if you have any additional questions.