When you hire a nanny, you are considered a “household employer”. And the nanny – or another person performing work in or near your home, like a health aide, housekeeper, gardener, cook, personal assistant, estate manager, etc. — is considered an employee of the family. Misclassifying an employee as an “independent contractor” is viewed as tax evasion by the IRS.
If a household employee is paid more than $2,100 in a calendar year, the household employer is required to withhold and remit payroll taxes to the state and the IRS. If a household pays an employee less than the threshold in a calendar year, payroll taxes are not required to be withheld and remitted; however, the household is still legally considered an employer and, therefore, must adhere to federal and state labor laws.
In this post, we review your responsibilities as a household employer, and suggest a do-for-you solution by our partner, HomePay.