Knowledge Center

Tax Breaks and Concerns

• American Rescue Plan act of 2021 Tax Incentives for Household Employers & Employees

  Never been a Better Time to Put Your Household Employees on Books The American Rescue Plan Act of 2021 was passed on March 11, 2021 and offers much-needed financial relief to employers and employees alike. This $1.9 billion bill is intended to address the financial impact of COVID-19 by offering unemployment benefits, expanding tax credits,... Read more »

• Answers to the Most Frequently Asked Questions About Your Annual Payroll Tax Filings

  HomeWork Solutions, Inc., December 2023 PLEASE NOTE: All Form 1040 and Schedule H line numbers refer to the forms for the tax year 2023 in these annual payroll tax filings questions. How do I distribute Form W-2 to my employee?Complete and Essential Payroll Clients: Your Employee W-2 forms are available for distribution in your eFiling... Read more »

• How Does the IRS Calculate Penalties and Interest?

  Late payment of employment taxes will trigger penalties and interest charges to the taxpayer. The notices for an IRS late tax penalty are next to impossible to decipher. Statute of Limitations on IRS Interest and Penalty Calculations There is NO statute of limitations on the failure to file and report payroll taxes (Social Security, Medicare,… Read more »

• HWS MemberPage FAQs

  HomeWork Solutions, Inc., December 2023 PLEASE NOTE: All Form 1040 and Schedule H line numbers refer to the forms for the tax year 2023 in these annual payroll tax filings questions. How do I distribute the many copies of Form W-2?Complete and Essential Payroll Clients: Your Employee W-2 forms are available for distribution in your... Read more »

• Nanny Tax Wage Test Steadily Increases

  The nanny tax wage test, the minimum amount of wages paid that obligates the household employer for household employment taxes, is $2,700 of wages paid to an employee in the year 2024 (or $1,000 paid total in a calendar quarter for FUTA tax). HomeWork Solutions, Inc., May 2024 Nanny tax legislation enacted in 1994 dramatically… Read more »

• How to File and Pay Virginia Withholding Electronically

  The Virginia Department of Revenue is requiring e-filing of employer withholding tax returns and payments. Here are some tips for filing and paying the Virginia employer withholding tax. Household employers find that eForms is an easy and intuitive filing scheme. Whether you have little to no computer experience or you are an expert, eForms is the… Read more »

• IRS Announces Penalties for Incorrect Forms W-2, Wage, and Tax Statement

  Household employers will incur significant incorrect Form W-2 penalties if there are name and Social Security number mismatch problems. The Social Security Administration returns incorrect forms W-2 (name and Social Security number mismatch problems) to employers for corrections. The Internal Revenue Service assesses penalties to household employers filing Forms W-2 with mismatched names and Social… Read more »

• Are there any household employer tax breaks an employer can take advantage of?

  What Household Employer Tax Breaks Can Families Leverage? There are two popular household employer tax breaks for families to make care more affordable.  A family may only use up to $6,000 paid to a nanny or senior caregiver (qualified expenses) in any particular year. These tax breaks are not income-restricted. They do require, however, that… Read more »

• I have heard that I may qualify for childcare related personal income tax breaks? Does this apply when I hire a nanny?

  When you hire a nanny you may qualify for a childcare related personal income tax breaks. There are two popular strategies that families with child care expenses use to minimize their personal income taxes and are in addition to the Child Tax Credit, which in 2018 rose to $2000 per child and is available to… Read more »

• Do the Nanny Tax rules ever change?

  Yes. The 1995 Federal legislation, the “simplification” of the nanny tax rules, began a cascade of changes that continues today. Nanny tax rules alone are not the only regulations the household employer must follow. Numerous changes to federal and state labor laws specifically impact household employers. Federal Employer Identification Number required for all household employers…. Read more »