{"id":11954,"date":"2017-02-10T13:43:35","date_gmt":"2017-02-10T18:43:35","guid":{"rendered":"https:\/\/gtm.com\/household\/?p=11954"},"modified":"2021-08-18T14:14:58","modified_gmt":"2021-08-18T18:14:58","slug":"paying-nanny-taxes-not-just-government-employees","status":"publish","type":"post","link":"https:\/\/gtm.com\/household\/paying-nanny-taxes-not-just-government-employees\/","title":{"rendered":"4 Ways Anyone – Not Just Government Employees – Can Get Caught Not Paying Nanny Taxes"},"content":{"rendered":"

\"paying<\/p>\n

Update:\u00a0Andrew Puzder withdrew his nomination to be labor secretary on Wednesday, February 15.
\n<\/em>
\nFollowing the presidential election in November, new potential Cabinet members\u00a0have been going through the nomination process in the Senate. Two of\u00a0those nominees have come under fire for issues relating to the hiring and paying of household workers. President\u00a0Trump\u2019s choice for White House budget director, Mick Mulvaney,\u00a0failed to pay more than $15,000 in household payroll taxes,<\/a>\u00a0jeopardizing his nomination to the post. Mulvaney needs to pay state taxes, penalties, and interest, despite saying he settled his federal tax bill.\u00a0President Trump\u2019s choice to lead the Labor Department, Andrew Puzder, has admitted that\u00a0he employed an undocumented immigrant to work in his home<\/a>, saying he has paid all back taxes to the IRS and the state of California. He claims that once he found out she was not legally permitted to work in the U.S., he terminated the housekeeper.<\/p>\n

Of course, this is not the first time we’ve heard of this issue; the subject of nanny taxes has come up with nominees for Cabinet posts for Bill Clinton<\/a>, George W. Bush<\/a>, and Barack Obama<\/a>. But while these cases are very high-profile and make news headlines, paying nanny taxes is not just for government employees. It’s the law for anyone who pays a household worker more than $2,000 (2017) in a year, and just because a family isn’t answering questions in front of a Senate panel, there are many ways to get caught paying an employee illegally.<\/p>\n

One of the most common ways employers who aren’t paying legally are exposed occurs when their employee gets injured on the job. In this case study, not having workers’ compensation coverage can be extremely costly:<\/p>\n

A household employer living in New York State hired a nanny to care for his children but ignored the state’s workers\u2019 compensation coverage requirement. One day the nanny slipped and hurt her back. The doctor asked how she got hurt, and she relates that it happened while she was working. This leads to a workers\u2019 compensation claim. New York is one of the many states that require household employers to carry workers’ compensation insurance for their employees. Of course, the workers\u2019 comp board in New York had no record of her even being employed because the employer hadn\u2019t paid her legally. So<\/em>\u00a0not only was the household employer penalized $37,000 by the New York Workers\u2019 Compensation Board for not having a policy, the New York State Department of Tax and Finance and the IRS got involved, requiring the employer to open their wallet again to cover the back taxes and penalties incurred by not paying their employee legally.<\/em><\/p>\n

Another common way the government discovers an employer is not paying their employee legally is when that employee leaves the job and files for unemployment insurance.\u00a0But that can lead to the\u00a0state\u2019s labor department having\u00a0no record of the\u00a0employee holding a job. Why not? Because the employer hasn\u2019t been paying unemployment insurance. This immediately raises a red flag\u00a0and the employer\u00a0can expect a call from the state, with significant fines likely to follow.<\/p>\n

A third way employers paying “off the books” are exposed is when their employee decides they want to start being paid legally. For example, the two parties originally agreed on not withholding taxes, but later the employee started to notice what she was missing; she can’t apply for a loan or obtain credit because she has no legal work history; she isn’t saving any money for retirement and isn’t eligible for Medicare or Social Security benefits, and she can’t apply for unemployment insurance if she leaves the job. She wants to start getting these benefits, and if the employer does not agree to start paying legally, she can sue the employer, resulting in paying back taxes and penalties once the illegal working relationship comes to light, along with court and attorney costs.<\/p>\n

A\u00a0final common way for an employer to be exposed\u00a0for not paying nanny taxes is in the case of an audit by the IRS or state tax agency. The audit could be a result of one of the above examples, or if there is another reason for an audit to be conducted, the non-payment of nanny taxes would be\u00a0discovered, leading to far more fines and legal troubles than the original reason for the audit would have generated.<\/p>\n

The bottom line is that it’s illegal to avoid paying nanny taxes, whether you’re a nominee for a Cabinet position, or you’re a regular family from Anytown, U.S.A. that\u00a0hires a household employee.<\/p>\n

For more information on the benefits for both employers and employees on paying nanny taxes, download our 7 Benefits of Domestic Employment Law Compliance<\/a>, or contact us<\/a> at (800) 929-9213.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Even if you’re not being questioned by a Senate panel, you can still be exposed for paying under the table. Here are some examples of why paying nanny taxes is not just for government officials, and how anyone can be exposed for breaking the law.<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[80],"tags":[38,42,55],"class_list":["post-11954","post","type-post","status-publish","format-standard","hentry","category-tax-wage-laws","tag-irs","tag-nanny-payroll","tag-taxes"],"yoast_head":"\nPaying Nanny Taxes is not Just for Government Employees<\/title>\n<meta name=\"description\" content=\"Government officials have been in the news lately regarding nanny taxes, but paying nanny taxes is not just for government employees; it's the law for all.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/gtm.com\/household\/paying-nanny-taxes-not-just-government-employees\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Paying Nanny Taxes is not Just for Government Employees\" \/>\n<meta property=\"og:description\" content=\"Government officials have been in the news lately regarding nanny taxes, but paying nanny taxes is not just for government employees; it's the law for all.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/gtm.com\/household\/paying-nanny-taxes-not-just-government-employees\/\" \/>\n<meta property=\"og:site_name\" content=\"GTM Household\" \/>\n<meta property=\"article:published_time\" content=\"2017-02-10T18:43:35+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-08-18T18:14:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/gtm.com\/household\/wp-content\/uploads\/US_Capitol_Building_at_night_Jan_2006-1024x773.jpg\" \/>\n<meta name=\"author\" content=\"GTM Payroll\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"GTM Payroll\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/gtm.com\\\/household\\\/paying-nanny-taxes-not-just-government-employees\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/gtm.com\\\/household\\\/paying-nanny-taxes-not-just-government-employees\\\/\"},\"author\":{\"name\":\"GTM Payroll\",\"@id\":\"https:\\\/\\\/gtm.com\\\/household\\\/#\\\/schema\\\/person\\\/5696289a269315ec74e98df4f58f74fd\"},\"headline\":\"4 Ways Anyone – Not Just Government Employees – Can Get Caught Not Paying Nanny Taxes\",\"datePublished\":\"2017-02-10T18:43:35+00:00\",\"dateModified\":\"2021-08-18T18:14:58+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/gtm.com\\\/household\\\/paying-nanny-taxes-not-just-government-employees\\\/\"},\"wordCount\":824,\"publisher\":{\"@id\":\"https:\\\/\\\/gtm.com\\\/household\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/gtm.com\\\/household\\\/paying-nanny-taxes-not-just-government-employees\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/gtm.com\\\/household\\\/wp-content\\\/uploads\\\/US_Capitol_Building_at_night_Jan_2006-1024x773.jpg\",\"keywords\":[\"IRS\",\"nanny payroll\",\"taxes\"],\"articleSection\":[\"Tax & Wage Laws\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/gtm.com\\\/household\\\/paying-nanny-taxes-not-just-government-employees\\\/\",\"url\":\"https:\\\/\\\/gtm.com\\\/household\\\/paying-nanny-taxes-not-just-government-employees\\\/\",\"name\":\"Paying Nanny Taxes is not Just for Government Employees\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/gtm.com\\\/household\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/gtm.com\\\/household\\\/paying-nanny-taxes-not-just-government-employees\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/gtm.com\\\/household\\\/paying-nanny-taxes-not-just-government-employees\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/gtm.com\\\/household\\\/wp-content\\\/uploads\\\/US_Capitol_Building_at_night_Jan_2006-1024x773.jpg\",\"datePublished\":\"2017-02-10T18:43:35+00:00\",\"dateModified\":\"2021-08-18T18:14:58+00:00\",\"description\":\"Government officials have been in the news lately regarding nanny taxes, but paying nanny taxes is not just for government employees; 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