Nanny Payroll New Year's Tip

Payroll tax reporting is based on the day the employee received payment (constructive receipt) for the services.

Therefore, if you pay for the week 12/28/2009 - 1/1/2010 on Friday January 1, 2010, this is treated as 2010 wages, reportable in the first Quarter of 2010 and included in the 2010 Form W-2.

On the other hand, if you pay for the week 12/28/2009 - 1/1/2010 on Thursday December 31, 2009 this is treated as 2009 wages, reportable in the 4th Quarter of 2009 and included in the 2009 Form W-2.