Take the Hassle Out
of Nanny Taxes
Protect Your Clients
You know that your client’s taxes can be complicated. When they hire a nanny, a home health aide, or other household employee, things get even messier thanks to labor laws and the “Nanny Tax.” Because some household employers may not understand IRS tax rules and state laws around employing caregivers and housekeepers, they may turn to you for guidance. Fortunately, for CPAs looking to outsource nanny taxes, HomeWork Solutions is the perfect partner.
Fortunately, you can help your clients navigate the legalities of hiring a household nanny—and receive assistance along the way.
Why Are Household Payroll Taxes Important?
As a CPA, ensuring your clients understand and comply with their employment tax obligations as household employers is a must! Former employees can file for state unemployment benefits, which alerts the IRS that your client may have skipped paying their household employment taxes. Further, if a nanny ever finds cause to file a wage dispute against your client, as lack of tax payments could easily be exposed and your client won’t have complete payroll records that are legally required.
Other reasons why filing taxes is essential for your client include:
- Ensures client’s ability to obtain worker’s compensation insurance
- Protects against future liabilities
- Qualify for a tax credit
- Protect client’s future career opportunities
- Ensures financial security for employees
Make Payroll Simple
Automated Process
Our self-service portal automates payroll calculations, tax withholdings, and payments, ensuring accuracy and efficiency.
Including FICA tax and unemployment taxes.
Time Tracker
Our integrated time tracking system ensures accurate recording of hours worked, simplifying payroll processing.
Easy Year-End Filing
We handle all end-of-year tax forms and filings, ensuring compliance and peace of mind for both employers and employees.
Guaranteed Compliance
Be confident that all payroll and tax compliance requirements are met, avoiding penalties and legal issues.
Including compliance with federal and state regulations.
Looking to Outsource Nanny Taxes
We’re committed to taking the burden of household payroll and taxes off your shoulders. When you outsource your client’s nanny tax to HWS, you get access to all tax records and filings for your clients (with their permission) in a central portal. This eliminates time spent asking your clients to send their tax information at year end. You can go get the information you need, when you need it. HWS offers flexible service plans that can be customize to your client’s needs, whether they are interested in full payroll services with direct deposit or simply quarterly and annual tax filings.
Our Pricing Plans
Essential Tax
$185/per quarter
- Effortless new employer setup
- Federal, state, & local tax withholding & filing
- Annual Schedule H & W-2 preparation and delivery
Complete Payroll + Tax
From $239/per quarter
- Effortless new employer setup
- Federal, state, & local tax withholding & filing
- Annual Schedule H & W-2 preparation and delivery
- Secure online portal with Digital VaultTM
- Hassle-free tax notice management
- Web-based timecard tracking included
- Payment processing of healthcare (QSEHRA and ICHRA) & other reimbursements
- Worker's compensation insurance referral
- Dedicated payroll specialist
Premier Payroll + Tax + HR
From $389/per quarter
- Effortless new employer setup
- Federal, state, & local tax withholding & filing
- Annual Schedule H & W-2 preparation and delivery
- Secure online portal with Digital VaultTM
- Hassle-free tax notice management
- Web-based timecard tracking included
- Payment processing of healthcare (QSEHRA and ICHRA) & other reimbursements
- Worker's compensation insurance referral
- Dedicated payroll specialist
- Weekly payroll at no extra charge
- Dedicated tax coordinator
- Unbiased workers' compensation insurance guidance
- QSEHRA health benefit plan consultation
- Live onboarding for you and your employees
- On-demand payroll reports
Request a Consultation
Frequently Asked Questions
Many people are confused by the distinction between employees and independent contractors. This distinction is important because employers of household employees file and pay employment taxes. Independent contractors handle their own tax filings. The IRS determines worker classification primarily based on who controls the work being performed. If you have the right to control or define the work to be done and how the work will be done, and if you control financial aspects of the relationship, according to the IRS you are an employer. Read more
Many families mistakenly believe that paying their nanny cash, off the books, is easiest all around. After all, no complicated tax forms, the nanny takes home more money, the family doesn’t pay taxes, it sounds good all around. Until it isn’t good at all! Read more
Household employers file and pay the exact same employment taxes as commercial employers do. The IRS established the Form 1040 Schedule H in 1995 to simplify and streamline the household payroll tax reporting. Often times, however, the household employer or their CPA are confused about the proper reporting and begin filing quarterly form 941 for… Read more »
The IRS is increasing its focus on improperly classified domestic workers, including those hired as senior home care professionals. As an employer of a household employee, you must be aware of these changes for tax season. Misclassifying a household employee as an independent contractor can expose the household employer to multiple risks. An adult over… Read more »
Nanny workers compensation insurance protects the caregiver and the employer from the expenses and liabilities associated with a work-related accident. A single accident can leave the household employer liable for thousands of dollars in medical bills. Don’t assume that this liability is covered under your Homeowner’s Insurance Policy! Most states require household employers to carry Workers’ Compensation… Read more »
Considering adding a nanny on business payroll? Nanny employers who own a business or a farm operated for profit can choose to include their nanny’s payroll in their 941 or 943 tax returns. The ‘nanny taxes’ are exactly the same employment taxes paid for other employees and do not require special calculation. What the sole… Read more »
Fair Labor Standards Act (FLSA) overtime rules and domestic employment are often misunderstood by the household employer. The temptation is to either agree to a weekly “salary”, agree to “average hourly rate” (pay $15 an hour for 45 hours for example) and or to average weeks (pay bi-weekly and average the two weeks hours to… Read more »
Nannies and other ‘domestic service employees’ are classified under the Fair Labor Standards Act (FLSA) as non-exempt workers. The term non-exempt employee refers to a worker who IS subject to the terms of the FLSA regarding such issues as overtime compensation and minimum wage coverage, contemporaneous time tracking record keeping, as well as nanny pay frequency. FLSA requirements are determined not by the type of pay (hourly or salary) but by the type of work that is performed. Read more
Different states and localities have different household employment laws. Here’s a handy page with links to all 50 states. See state household employment laws.