Nanny Fringe Benefits & Mileage Reimbursement Rates
Internal Revenue Service Publication 15B: Employer's Tax Guide to Fringe Benefits is available as formal IRS guidance on non-taxable fringe benefits.
Mileage Reimbursement Rate
For reimbursement of nanny's business use of her personal vehicle. This will include such things as transporting your child(ren) to/from school or activities, errands, shopping, etc. It does not include the nanny's commuting mileage to/from her home to her place of employment.
|Jan 1, 2013 -||56.5 cents a mile|
|July 1, 2011 - Dec 31, 2012||55.5 cents a mile|
|Jan 1 - June 30, 2011||51 cents a mile|
|Jan 1 - Dec 31 2010||50 cents a mile|
|Jan 1 - Dec. 31, 2009||55 cents a mile|
|July 1 - Dec. 31, 2008||58.5 cents a mile|
|Jan. 1 - June 30 2008||50.5 cents a mile|
|Jan. 1 - Dec. 31, 2007||48.5 cents a mile|
|Jan. 1 - Dec. 31, 2006||44.5 cents a mile|
|Sept. 1 - Dec. 31, 2005||48.5 cents a mile|
|Jan. 1 - Aug. 31, 2005||40.5 cents a mile|
HomeWork Solutions, Inc., November 2012
The standard mileage rate is established by the IRS, and the nontaxable amount that is used by employers to reimburse employees for the business use of their personal automobiles. This is the reimbursement rate guideline that most nanny employers utilize to determine the mileage reimbursement for a nanny who uses her personal vehicle to transport the children and run errands. The rate typically adjusts once per year, with announcements made in November for the next year's rate.
Insurance Benefits: The IRS will allow the employer to pay the cost of an medical or health insurance plan for employees, including an employee's spouse and dependents. These premium payments are not wages and are not subject to social security, Medicare, and FUTA taxes, or federal income tax withholding. Generally, this exclusion also applies to qualified long-term care insurance contracts. To qualify, this benefit must be offered to all similarly situated employees. The employer should write the premium payment check directly to the insurer.
For tax years 2010 - 2013, some household employers may be eligible for a tax credit for employer paid health insurance premiums. Small Business Health Care Tax Credit: Frequently Asked Questions
Social Security Wage Base: The Social Security wage base for 2013 is $113,700. The 2012 wage base was $110,100. The maximum amount an employee can have withheld for Social Security tax in 2012 is $4620. For 2012, the employee contribution to Social Security via payroll deductions is temporarily reduced to 4.2%. Employers must contribute of the employee's gross pay 6.2% for Social Security taxes up to the wage base, and 1.45% for Medicare (which has no wage base).
Qualified Transportation Fringe Benefit: $125 per month for 2012 and 2013. Under the American Recovery and Reinvestment Act of 2009 (ARRA), for March 2009 through December 31, 2011, the tax-free amount an employer may reimburse an employee monthly under a qualified transportation fringe benefit plan increased temporarily to $230.
Educational Assistance: The annual tax free amount for employer-provided educational assistance is $5,250 for 2006 - 2012 and now also applies to graduate-level course work. According to the IRS, "Employers offering tax-free educational assistance are required to have a written plan describing the benefit and the terms under which it is available." (Notice 97-60 Exclusion For Employer-Provided Educational Assistance). Translation: put it in writing in your written work agreement. Non-discrimination tests apply. An employer may pay for any form of instruction or training that improves or develops an individual's capabilities, whether or not job-related or part of a degree program under a qualified education assistance program without defeating the non-taxable status of the benefit supplied to the employee. MORE INFORMATION
» Internal Revenue Service Publication 15B: Employer's Tax Guide to Fringe Benefits