Nanny Issues with e-Filing Federal Tax Return?

Throughout tax season we get reports from clients that their nanny's e-filed income tax return was rejected. The following are the most common reasons:

Mismatch between nanny's name on the tax return and the IRS records. Correcting this requires a visit to a local Social Security Administration office, the completion of SSA Form SS-5, and original or certified documents attesting to the name change (marriage license, divorce decree, etc.).

The EIN on the nanny's W-2 is not found. This is typical for EIN's issued within 90 days of the attempted tax filing. Unfortunately, IRS databases do not all synchronize overnight. Paper filing is the best option in this situation.

Employee's SSN or ITIN not found. Similar to reason above, if this is the first year that the employee has ever filed a tax return and has never been a dependent on another return, paper filing is the best option.

Of course, all of the above problems could simply be the result of a typographical error. Your rejected tax filing can be corrected and resubmitted if that is the situation.