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Taxable Nanny

As discussed earlier, there are important differences between nannies and au pairs. While the au pair is not considered an employee in your home, the nanny clearly can be depending on the arrangement. If he or she is not an employee of an agency then you are the employer. Where there is an employee, there are taxes. If you are the nanny's employer, you are responsible for not only paying taxes, but also frequently a good deal more:

  • Social Security and Medicare taxes (FICA)

  • Federal unemployment taxes (FUTA)

  • Filing a W-2 form for your nanny

  • Obtaining a federal employer number (EIN) from the IRS

  • Reporting wages and taxes relevant to the nanny under Schedule H or “Household Employment Taxes”

  • Reporting taxes paid in relation to your nanny on your Form 1040 which is filed together with your Schedule H


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