Summer & Part Time Nannies - Does the Nanny Tax Apply?

Many families with elementary school aged children turn to summer nannies to provide childcare during the summer vacation. These are generally college students themselves on vacation. Other families use part time nannies - one, two or three days a week. Some mistakenly believe that part time or temporary work is exempt from employment taxes.

The family who pays the summer or part time nanny $1500 or more in the year IS subject to all of the same tax rules and filing requirements as employers of year round full time and part time household workers. These include Social Security and Medicare Taxes (15.3% of wages paid) as well as Federal and State unemployment taxes.

There are some limited exceptions for the occasional babysitter, particularly those under 18 years of age. The term occasional, however, is limited to less than $1500 in wages paid per year UNLESS the caregiver meets one of the stated exceptions. See the exceptions stated here.