Knowledge Center

Special Situations

• Is a nanny bonus reported as wages?

  I gave our nanny a $2000 holiday bonus. Do I have to report the nanny bonus as wages, and will there be a tax on bonus payments? A nanny bonus payment IS considered taxable wages. “Wages” are defined by the IRS as all remuneration paid, including the cash value of all remuneration paid in any… Read more »

• How can I help my nanny build a retirement savings account?

  There are some practical ways an employer can help their nanny build a retirement savings account. The SEP-IRA Employers can set up a SEP-IRA to help build a retirement savings account for their nanny. The contributions are 100% funded by the employer. Sometimes employees will ask to ‘defer’ a raise and have the $50 or so… Read more »

• How to Write a Nanny Letter of Recommendation

  Our wonderful nanny will be leaving in September when our son begins full time school. How do we help her with a letter of recommendation? The nanny’s letter of recommendation from her former employer is an important part of her “Nanny Portfolio,” a collection of materials including her resume, work history, educational certifications, and examples… Read more »

• My nanny wants net take home pay of $600 a week. What does that mean?

  Many household employees, including nannies, expect to negotiate a “net wage” or “net take home pay” agreement with their employer. The net take home pay agreement is a foreign concept for many nanny employers, and often the new employer does not fully understand the financial implications of a net pay agreement with the nanny or… Read more »

• Nanny Holiday and Year End Bonuses

  Do I give my nanny a holiday bonus or a yearend bonus? Many employers seek guidance on bonus and incentive pay norms for nanny employment. There is no “one size fits all” solution; there are as many creative ways to approach this as there are nanny employers. A cash bonus is by far the most… Read more »

• How do we handle nanny share payroll taxes with another family?

  When you share a nanny with another family, both families become employers. Presuming that you each pay the nanny for the work performed for your individual family, each employer is responsible for withholding nanny share payroll taxes and the periodic remittances of payroll taxes. Nanny share payroll taxes can be confusing, especially if you are… Read more »

• What are my tax responsibilities with a temporary nanny? She only worked for us for six weeks while my wife was on bed rest.

  Many families hire temporary nannies or other temporary household workers and have many questions about their financial and legal responsibilities. Examples include the temporary nanny who is working while the mother is on bed rest, the respite senior caregiver staying with an aged family member while you are away for work or vacation, or the… Read more »

• My nanny or caregiver is not a legal resident. What should I do about employment taxes for undocumented nanny?

  The Internal Revenue Code maintains that the immigration status of your nanny or other employee has no bearing on your obligation for nanny employment taxes. Immigration enforcement is focused on penalizing the EMPLOYERS - particularly prosecution for employment tax fraud. Employing an undocumented worker is a violation of immigration law. The employer's risk here is... Read more »

• Can I hire a nanny who has a F-1 (J-1) Student Visa. Are there special rules?

  SUMMARY: Since 1994, off campus work (including work in a private home as a nanny, SENIOR CAREGIVER, housekeeper, maid or other domestic work) is generally prohibited for J-1 or F-1 student visa holders. HomeWork Solutions’ clients may choose to hire a foreign nanny and have their employment eligibility verified using the DHS e-Verify program, also... Read more »