tag:blogger.com,1999:blog-196060042010-02-08T12:48:11.363-05:00Periodic updates, alerts, and food for thought from HomeWork Solutions Inc, the nation's premier provider of nanny payroll and tax solutions to individual employers, CPAs and trust companies.Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.comBlogger229125tag:blogger.com,1999:blog-19606004.post-40031155138232959862010-02-08T12:43:00.000-05:002010-02-08T12:43:19.018-05:00

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

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-33670894412170381652010-01-13T13:52:00.001-05:002010-02-08T12:48:11.384-05:00

Massachusetts is working to get all employers, including nanny employers, to report (and pay) withholding taxes, wages paid in a quarter, and unemployment taxes online - replacing a paper process that had employers mailing 3 paper forms to 3 different addresses every quarter with one simple online process. Sounds good - right? Well - maybe! The system went online first quarter 2009 and was

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-43349981906503919882010-01-11T08:50:00.001-05:002010-01-11T08:50:00.813-05:00

In an incredibly interesting and complicated court case involving: Wrongful Discharge Breach of Employment Contract Unpaid Wages Unpaid Overtime the United States District Court, D. Oregon affirmed that nannies are indeed non-exempt employees and are entitled to hourly pay and overtime pay for hours worked in excess of 40 in a work week. The court further affirmed that a work agreement that was

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-14193059564354383532010-01-07T10:22:00.000-05:002010-01-07T10:22:22.243-05:00

If you answered yes to both of these questions, PLEASE recalculate her paycheck deductions using the 2010 rates ASAP. For a married nanny earning $18,000 a year, her Federal income tax withholding could have doubled. If she earns $22,000 it could go up by a third! Why? 2009 post-stimulus rates spread the "Making Work Pay" tax credit across only 9 months - April through December. This year the

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-8252356574781645722009-12-30T14:34:00.000-05:002009-12-30T14:34:33.820-05:00

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

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-47483711801604577992009-12-30T08:58:00.001-05:002009-12-29T08:53:31.504-05:00

Several news reports recently claim there are more than 200,000 household workers in New York State. According to journalist Elayne Clift: More than 200,000 women work as nannies, companions and housekeepers in New York State keeping households and families going. They work long hours - from ten to sixteen hours a day - but receive no overtime pay. They lack health insurance and are often denied

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-32624437038848247082009-12-28T08:00:00.002-05:002009-12-28T08:00:06.254-05:00

According to a survey conducted by the National Association of State Workforce Agencies, employer funded unemployment insurance taxes will increase in 35 states in 2010. Twenty-four states will see increases in the state's taxable wage base, or the level of each employee's wages that is subject to a payroll tax on employers. 28 states report that tax rates on employers in those states will

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-62624027217314776062009-12-18T09:00:00.001-05:002009-12-18T09:00:09.839-05:00

Several items that we blogged about previously on the Nanny Tax blog will generate questions as the end of year and income tax filing season approaches. Here is a quick re-cap: 1. Married or 2-Income Nannies will find that the "Making Work Pay" tax credit may have caused under-withholding through out the year on Federal Income taxes, and an unexpected several hundred additional dollars in taxes

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-38668537805896131592009-12-15T15:40:00.000-05:002009-12-15T15:40:10.080-05:00

Holiday schedules have created some previously announced changes to the payroll schedule. The last date to report any bonus payments for deposit Thursday December 24, 2009 is tomorrow, Wednesday December 16 at NOON. The December 31 payroll closes on Tuesday December 22 at NOON for all weekly and bi-weekly payroll clients. Changes reported after these dates will be deferred until the next

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-63661092893276542832009-12-15T08:51:00.002-05:002009-12-15T08:51:00.947-05:00

Nanny employers who withhold (deduct) their employee's Federal Income Taxes should re-calculate the withholding rate for 2010. New federal rates are available at the 4nannytaxes.com website - just be sure to select the correct tax year in the drop down! When you make the change to the nanny's withholding, please send us your new net pay calculation (> Action > Submit Payroll Change) so your

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-41905484943067432472009-12-14T13:05:00.001-05:002009-12-21T11:34:01.382-05:00

The Department of Homeland Security's Citizenship and Immigration Services will launch an individual self-check capability in the E-Verify program in 2010. This will allow workers to verify their own work authorization status before they apply for a job. E-Verify is the federal government's mostly voluntary electronic employment verification program. E-Verify will confirm I-9 data provided to the

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-22016544128067457132009-12-10T11:28:00.001-05:002009-12-14T10:26:47.003-05:00

HomeWork Solutions has a new publication in it's popular 10 Tips Series, titled "10 Tips: Define Your Nanny's Job". A nanny works in your private home providing full charge child care for you according to your instructions and best safety practices. She cares for your children, and at the end of the day YOU are perfectly entitled to set some firm "Ground Rules" or "House Rules" for the nanny to

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-83267475901602981702009-12-07T09:14:00.000-05:002009-12-07T09:14:28.228-05:00

The IRS has announced that the approved reimbursement rate for employee use of his/her personal vehicle for work purposes will be $0.50 per mile, down from the 2009 rate of $0.55 per mile. According to the IRS, "The mileage rates for 2010 reflect generally lower transportation costs compared to a year ago." Mileage reimbursement is typical when a nanny uses her personal vehicle to transport her

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-83534192144437957752009-12-02T12:23:00.000-05:002009-12-02T12:23:28.876-05:00

We recently worked with a New York client who let his nanny of 10 months go. The nanny, of course, filed for unemployment benefits. The client was dutifully registered as a household employer and had been paying the taxes per the documents we prepared. Sounds pretty straight forward, except... This client reported that the employee received $200 per week. However, in reality the nanny was

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-28611817415962877072009-11-30T12:02:00.024-05:002009-11-30T12:02:00.191-05:00

We have blogged earlier about increases in 2009 unemployment taxes for nanny employers. Unemployment continues unabated into 2010, and more nanny employers will feel the pinch of increased unemployment taxes in the new year. In Florida, the minimum unemployment tax will rise to $100.30 per employee in 2010 from $8.40 in 2009. Established nanny employers (2+ years of continued household

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-11607659186929002202009-11-30T11:02:00.001-05:002009-12-01T09:49:28.693-05:00

The Indiana Department of Workforce Development has announced an increase in the taxable wage base from $7,000 for 2009 to $9,500 for 2010. For most employers this marks a 35% increase in the unemployment tax over the year. In Nevada, the wage base will increase from $26,600 for 2009 to $27,000 for 2010. New Hampshire, Minnesota, Florida and Arkansas have also all increased their wage base for

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-6382004399910139912009-11-23T11:41:00.000-05:002009-11-23T11:41:28.755-05:00

HomeWork Solutions previously announced it's 2009 Charitable Giving Initiative. It is time to update our clients and industry colleagues on the initiative's status. The following organizations' food pantry services have been selected as recipients of our charitable donations through October 31, 2009. The Manna Food Center of Montgomery County MD: Manna provides food to 37 Montgomery County

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-37367194896785917422009-11-18T09:25:00.001-05:002009-11-18T11:35:27.473-05:00

The IRS's 2010 budget request includes an increase of approximately $300 million above its 2009 appropriations for enforcement. Conventional wisdom says that IRS compliance activities recoup $5 for every $1 spent. Historically, IRS enforcement efforts step up in times of budgetary crisis. The efforts target closing the "tax gap" - the difference between taxes owed and taxes paid. The "nanny tax

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-68681304938277494142009-11-04T09:51:00.001-05:002009-11-04T09:58:28.157-05:00

Massachusetts is making another change to their online reporting systems, effective with 4th Quarter 2009. Effective January 2009 Massachusetts requires ALL employers, including nanny employers, to file and pay their withholding tax and unemployment tax online. Only one problem - the online systems did not support employers who DO NOT withhold income tax and only report unemployment taxes. Oops.

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-19002742650960500852009-11-02T14:45:00.002-05:002009-11-18T11:39:07.450-05:00

I find it utterly amazing that ACH tax payments made online are subject to a "convenience fee" by the taxing authorities. Indiana for example, allows you to file and pay via ACH (bank transfer/electronic check) unemployment tax online for a $3 convenience fee. So the taxpayer pays more to save the state the expense of opening the mail, posting the payment and sending the check for deposit, and

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-9286519459713603442009-10-29T09:50:00.004-05:002009-10-29T09:57:07.887-05:00

The US Department of State has issued non-immigrant visas to the personal attendants, servants, and maids of certain diplomatic and non-governmental staff members under G-5, A-3 and NATO-7 visa categories for many years. Guidelines for the sponsoring staff members were very broad, and subject to interpretation by the various sponsoring organizations. The State Department recently provided

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-10670825727483831202009-10-19T08:18:00.000-05:002009-10-19T08:18:59.590-05:00

Families who pay a nanny or other household employee $1700 or more in either 2009 or 2010 are liable for the "nanny taxes." Depending on your state, if you pay between $500 - $1000 in wages in a calendar quarter you are also liable for state unemployment tax filings. The "nanny tax" refers to Social Security and Medicare taxes due on the wages paid to a household employee. These total 15.3% of

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-78899885222074781052009-10-15T11:21:00.000-05:002009-10-15T11:21:54.667-05:00

The taxable wage base for Social Security taxes will not increase in 2010, marking the first time since COLA increases were implemented in 1975 that this has occurred. Additionally, Social Security benefits levels will also remain the same for 2010. With a $106,800 Social Security wage base, the maximum Social Security tax per employee is $6,621.60. The employer matches the employee's Social

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-42636519528752447312009-10-08T09:14:00.000-05:002009-10-08T09:14:55.629-05:00

Sigh! I blogged about the Get Square Virginia initiative last month. May I observe that Virginia is ZEALOUSLY attempting to collect back taxes? Many household employers go in and out of employment. They may have a nanny for a few years, switch to daycare or preschool, have another child and start all over again. This sounds pretty normal, right? Well, if you withheld VA income taxes, closed

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com0tag:blogger.com,1999:blog-19606004.post-66550873283077144902009-10-06T08:50:00.008-05:002009-10-06T12:55:13.646-05:00

Nanny job turnover is the nature of the beast - childcare needs by definition are constantly evolving. Often job terminations are planned, pleasant, and accompanied by a letter of recommendation. Sometimes, a nanny is simply fired. Maybe she was at fault, maybe not. Personality clashes, unexpected changes to a family's circumstances and even simple immaturity on the family's part or the nanny's

Kathleen Webbhttp://www.blogger.com/profile/01915361443110987132noreply@blogger.com1