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 »
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 »
Fair Labor Standards Act (FLSA) states that due to the nature of their work and duties, nannies and other household workers are employees, are hourly workers, and are covered by minimum wage and overtime laws. The FLSA requires employers to maintain accurate and complete contemporaneous time records for tracking hours worked by an employee. When… Read more »
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 »
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 »
Your nanny family let you go. You think to yourself: how do I get unemployment benefits? The working arrangement between you and the family is considered employment at-will under U.S. common law unless the written work agreement specifies a term of contract (which is a horrible idea). In broad terms, at-will employment means that employment is… Read more »
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 »
Most regular nannies are paid on a guaranteed pay basis. What this typically means is that the family agreed to pay the nanny a pre-determined salary for a given number of hours in a pay period. The full time nanny work schedule is often more than 40 hours per week. It is important to remember,… Read more »
