Your Nanny's Paycheck and the Stimulus Package...
We are already being asked for specifics on the stimulus package and how it will change payroll withholding and the ink isn't dry yet on President Obama's signature!
The key provision, Making Work Pay, is a $400 per person/$800 per family tax break that is intended to increase the size of your paycheck NOW to help stimulate the economy. There are income limitations, but most nannies will be covered by this.
There are NO published guidelines or time lines right now. Speculation in the payroll community is that new withholding tables will be published in March, with an April start to the new withholding rates. We are on top of it, there is simply nothing definitive to report right now.
If this does go into effect April 1, you will see an approximate $10/week reduction in Federal income tax withholding.
Nannies with children who qualify for the Earned Income Credit may see a change in those calculations too. The EIC is a tax credit, sometimes referred to as a "negative income tax" that is refundable.
The key provision, Making Work Pay, is a $400 per person/$800 per family tax break that is intended to increase the size of your paycheck NOW to help stimulate the economy. There are income limitations, but most nannies will be covered by this.
There are NO published guidelines or time lines right now. Speculation in the payroll community is that new withholding tables will be published in March, with an April start to the new withholding rates. We are on top of it, there is simply nothing definitive to report right now.
If this does go into effect April 1, you will see an approximate $10/week reduction in Federal income tax withholding.
Nannies with children who qualify for the Earned Income Credit may see a change in those calculations too. The EIC is a tax credit, sometimes referred to as a "negative income tax" that is refundable.
posted by Kathleen Webb at
3:04 PM
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