Summer Nannies & Nanny Taxes?

Many families hire temporary, summer only nannies to provide childcare services during school vacations.

Temporary, or summer only nannies, are subject to the same employment taxes and employer tax reporting as a permanent full time or permanent part time nanny. If the summer nanny earns $1700 or more in the year the family (the employer) is legally obligated to provide that nanny a W-2 at year end and to submit a Schedule H with their annual Federal Form 1040 to report and remit the employment taxes.

The family is legally entitled to collect on a pay check by pay check basis the Social Security and Medicare taxes (7.65%) from the employee; if they fail to collect they remain responsible to pay this to the IRS.

Unemployment taxes are likely due on the nanny's wage also. This is completely paid by the employer, and most reporting is done on a calendar quarter basis. Summer nannies who started in May are likely to trigger these tax obligations in the 2nd Quarter, covering April, May and June, and the taxes are generally due in July.

Free download - Learn more about the "nanny tax" and the employer's legal and financial obligations! Download HomeWork Solutions' free e-Book, the Nanny Payroll Tax Quick Start Guide.