Attention Nanny Employers! Virginia Tax Amnesty Program

Get Square Virginia, the Virginia tax amnesty program, will run October 7, 2009 through December 5, 2009.

The program DOES apply to employer income tax withholding. It DOES NOT apply to delinquent unemployment taxes.

Virginia will waive all penalties and half of the assessed interest if they receive the complete past due tax amount and one half of the assessed interest no later than December 5, 2009.

There is a stick along with this carrot. At the conclusion of Amnesty, any tax liability that was eligible for amnesty benefits, but remains unpaid, will be subject to a 20 percent post-amnesty penalty. The penalty applies to unpaid taxes only, not to outstanding balances of penalties or interest. The 20 percent amnesty penalty will be in addition to all other penalties.

More information is available online at www.GetSquareVA.com.

IRS Notices to Nanny Employers: Philadelphia Service Center

The IRS' Philadelphia Service Center recently mailed an entire batch of nuisance notices to household employers.

The notice reads:

Request for Your Tax Return
Why Are You Getting This Notice?
Our records show that you have not filed the tax return as shown below:
From 941 Federal Employment Tax...

We have received scores of these notices in our office, and we are confident that many of our clients have received them at their residences also.

Rest assured, as a household employer, you do not file a 941, you have no requirement to file a 941, your obligation is to include Form 1040 Schedule H with your annual income tax filing. We prepare this form for you at the end of every calendar year. So long as you have done this, you are fine.

IRS notices are intimidating. Fortunately, these are easy to handle. Here is how you respond:

1. On Page 3, A. Select the last option, None of the above.


2. Your explanation is: I am a household employer and I report all wages and remit all taxes on Form 1040 Schedule H. I have received this request in error.


3. On Page 4, please sign and complete as indicated.


4. Mail pages 3 and 4 back to the IRS using the envelope provided, insuring that the mailing address show through the window envelope.

That's it! The IRS will do this from a service center on average once every 18 months - no rhyme or reason other than perhaps a query that is not written correctly to exclude household employers?

Nannies and NY Metropolitan Commuter Transportation Mobility Tax

Many of our New York based household (nanny) employers are receiving literature pertaining to the NY Metropolitan Commuter Transportation Mobility Tax.

Household employers are NOT subject to the NY Metropolitan Commuter Transportation Mobility Tax. A household employer is one who hires one or more people to provide services (childcare, housekeeping, companionship) in and about their private home.

This tax applies to all employers who are legally obligated to withhold (deduct) income taxes. Household employers are specifically exempted from the obligation to collect income taxes from their household workers (nannies, maids, housekeepers, elder caregivers, etc.) under Federal and NYS law.

You can view more information at the New York State Website.

Common Nanny Tax Questions

Nannies and employers have been asking a few common questions over and over again in the last month. I will take a few moments to address here. Remember, there are very thorough answers in our online FAQ.

1. I had a falling out with my boss and left my nanny job without notice. I received a text from my employer, a lawyer, asking for my mailing address so she could "1099" me. Isn't she supposed to give me a W-2? What does this mean?

Nannies are employees of the families that they work for. As such, they are subject to employment taxes. Employment taxes are paid to the government by the employer, and the employer is entitled to deduct some of these taxes from your paycheck. If the employer does not deduct, THEY remain responsible for paying. YOU are responsible for your income taxes.

Your employer is legally obligated to provide you a W-2 form no later than January 31, 2010 for your 2009 employment.

2. I agreed to work for a family for cash - under the table. We agreed on a rate knowing that no taxes would be deducted or reported. My boss has been collecting money from a FLEX account and now knows she has to pay taxes and report my income. What does this mean to me?

When you agree to work under the table both you and your employer are agreeing to violate tax law, and there can be consequences to both of you if you are caught. Fortunately for you, it sounds like this can be rectified in a timely manner assuming this is 2009 income that your are referring to.

Your employer will need to give you a W-2 that documents the wages you were paid. She will file this with the Social Security Administration. She will have to pay the IRS the Social Security and Medicare taxes on your wage, and will likely need to pay unemployment taxes too. Your W-2 will show that NO income tax was deducted from your wage; this is legal in household employment. You will need to complete an annual income tax return to calculate the amount of tax due, if any, and make your payment to the IRS. Don't ignore the W-2 - the IRS will know you received one and will catch up with you sooner, rather than later. Enforcement is always stepped up when their are budget deficits and government programs awaiting funding.

3. I hired a foreign nanny who is here legally on a visa but she doesn't have a Social Security Card. What do we do about the taxes?
There are two possible scenarios at play here. The first is that your nanny is both legally present and legally authorized to work in the U.S. and is simply awaiting her SSN. If that is the case, the situation will resolve in about 6 - 8 weeks as that is the typical turn around time for a Social Security Number application. You need to report all income and pay all taxes from the date she starts, whether she has the number yet or not. Depending on your state taxing authority, you may incur a small penalty on your first filing if this number is not included.

The second possible scenario is that your nanny is legally present (has a visa) but does not have authorization to work in the U.S. By hiring her you are both in violation of U.S. law. You the employer are only permitted to hire citizens, permanent residents, or legal non-immigrants with a valid work visa. She too is violating her visa. This is a somewhat common occurrence with foreign students admitted to the U.S. to pursue university studies. You will have all of the employment tax obligations of an employer - the IRS does not care if your nanny is legal or not. Your nanny will file a W-7 application for a Individual Taxpayer ID Number (ITIN) with her first tax return (usually a 1040NR) and be issued an identifying number by the IRS. Therefore, for the first year all of your filings will be missing a SSN/ITIN, but in future year filings you will be able to utilize her ITIN for tax payment purposes.

Download Free Tip Sheet:

Keeping that Nanny Job - 10 Tips

You found a nanny job that fits you to a T. How do you keep it?

1. Be on time! Your employer is counting on you.


2. Call as soon as you know that you are running late, or will not be able to work due to illness. Your employer plans his/her professional schedule around your work; s/he needs time to shuffle commitments too.


3. Give 100% effort, and always finish your duties. It is NOT ok to leave the snack dishes in the sink!


4. Anticipate and communicate. Running low on diapers? Used up the last of the milk? Let your boss know.


5. Be positive. "I will" is a much more positive message than "I'll try." A sunny smile and cheery attitude is contagious.


6. Don't gossip; respect your employer's confidentiality.


7. Recognize opportunities to help and volunteer when you can. That milk that is running low? Offer to pick up a gallon at the market when you are out for a walk.


8. Avoid the temptation to criticize or complain. Remember #5 above?


9. In every job we occasionally need to do something that is "not my job." If it truly is a once-in-a-while kind of thing, do the task without complaint.


10. A flexible, "can do" attitude is valued in an employee.

I have heard many times from nannies that they will "never do such and such even once because then it becomes a permanent part of my job." Stop and think for a moment. Is taking out the trash really worth creating friction with your boss over? Yes, I realize sometimes an employer will keep adding duties until you cry uncle. This is not the norm though. Remember, nannying is a service profession, and your charges are not your only constituency. Going the extra mile on occasion and being a team player is valued, and creates much good will.

National Nanny Recognition Week

National Nanny Recognition Week is September 20-26, 2009. Since 1998, NNRW has focused to the positive contributions nannies make to the children they care for and their families instead of the negative issues the press seems to thrive on. This is a wonderful time to take a few moments to say "thank you" to your nanny.

The Association of Professional Nannies suggests the following ways to show your appreciation:

• Say Thank You


• Tell your friends good things about her knowing she will hear them back


• a surprise day off


• Have the children say Thank You


• Treat your nanny to breakfast or dinner made by the family


• a card and framed photo of the family


• Membership fees to a local nanny support group or other Professional Organization


• Pay for conference fees to Nannypalooza or INA with paid professional days to attend the event


• Tuition for college courses


• CPR Training


• Pay for dinner out with friends


• a raise


• an IRA


• gift basket of favorite treats


• gift certificates to favorite stores


• movie tickets


• gift certificate for manicure/pedicure or massage


• gym membership


• handmade card or gift from the child/children


• frequent flier miles to travel home

Congratulations to Perfect Match Nannies

Perfect Match Nannies - a Wisconsin based nanny and domestic placement agency - hosted it's annual Nanny Retreat last weekend at beautiful Lake Geneva, WI. By all accounts it was a fabulous success. The format of the Nanny Retreat includes training (Red Cross Water Safety in this case), professional development (interviewing and resume workshops) and peer networking.

Photos from the weekend are posted online.

The 2010 Nanny Retreat is scheduled for September 24-26, 2010 and will be held in Key Largo, FL.

HomeWork Solutions was proud to be an event sponsor.

Nanny/Housekeeper Awarded $125,000 in Back Wages

After a 4 year battle through the courts, a Peruvian nanny/housekeeper, Alejandra Ramos and a co-worker were awarded $125,000 in back wages. The former employers, Patricia Perales and Javier Hoyle, were also found guilty in Federal court of violating federal laws against human smuggling. The human smuggling charge was a consequence of the couple withholding the nanny's passport and threatening deportation.

According to the Miami Herald report, the withholding of domestic servants' passports by household employers is a common practice in South Florida, where the employers feel the servants may be lured away by higher paying jobs.

It is unclear whether the state will be pursuing criminal penalties against the couple.

Nanny Agency Provides Water Safety Training and Professional Development for Nannies

Hats off to Perfect Match Nannies - this annual event always earns high marks from attendees and HomeWork Solutions is proud to be a sponsor.

NANNIES FROM 4 STATES TO ATTEND WEEKEND LAKE GENEVA RETREAT
Local Nanny Placement Agency Hosts 3 Day Educational & Networking Event

As an early kick-off to National Nanny Recognition Week (held the 20-26th), on September 11, 12 & 13, the nannies are coming- to the French Country Inn in Lake Geneva, Wisconsin. From late afternoon on Friday to mid afternoon on Sunday, nannies (childcare specialists who are home employees to private families) from Wisconsin, Colorado, Michigan and Virginia will be joining together for an educational and networking event. The event is hosted by Perfect Match Nannies & Sitters (PMNS), of Janesville, WI, and will be the 3rd Annual Nanny Retreat hosted by the Wisconsin Placement Agency.

Nettie Weber, PMNS founder and owner, said, "We had a wonderful problem occur this year: We needed to go back and revamp our entire event when we looked at our final registration list, due to the high-level caliber of our attendees. We will have a total of almost 300 years of combined childcare experience at The Retreat! We have nannies who have worked in the industry for 20, 25, 36 years! It's inspiring that these women have dedicated their lives to nurturing, educating and caring for children and their families. We could not be happier with how our event represents the "professional, career nanny" on a grand scale. We are also excited to have the International Nanny Association's (INA) 2007 Nanny of the Year in attendance, as well as a 2009 runner-up! Our attendees are sure to leave with remarkable resources, new friends and a new vigor for their career."

The schedule includes such activities as American Red Cross Water Safety Training Certification, professional resource share time, problem solving round tables and social events, such as catered dinners and a Lake Geneva boat cruise.

PMNS places nannies, home managers, parent helpers & governesses in WI and was nominated for the 2008 Association of Premier Nanny Agencies' (APNA) Award. The agency has been featured in numerous national publications, on local news broadcasts and supports local civic and community activities. Weber, a nationally recognized leader in the nanny industry, serves as Public Relations Chair on the Board of the International Nanny Association and has been a featured speaker at 3 past conferences for both INA and National Association for Nanny Care (NANC). She also has authored several articles for national magazine publications and does frequent local speaking engagements.