Nanny Tax Deadline Looms for Parents
Household Employers Must Ensure IRS Compliance or Risk Costly Fines
GLENVIEW, Ill. -- March 13, 2013
Each year more than a million parents nationwide elect to hire a nanny to care
for their children. In fact, the U.S. Department of Labor cites the child care
position as one of the fastest growing job sectors, expected to grow 20
percent faster than other positions by 2020. This means more than a million
parents may or should be preparing to file their “nanny taxes” along with
their personal income taxes by the April 15 filing deadline. Failing to pay
the tax can result in back taxes, penalties, interest and fines up to $25,000.
Safety and convenience are common factors considered when hiring a nanny.
However many parents are unaware when hiring a nanny or any other ‘household
employee’ that they may be responsible for filing an annual “nanny tax” with
“When you hire a nanny or other household employee, it’s a bit like starting
an in-home business. Parents have to keep up with all the tax laws and
calculations as well as filing regulations from taxing agencies on the local,
state and federal agencies,” said SurePayroll CEO and President Michael Alter.
Nanny tax typically has to be paid when an employee earns more than $1,000 per
quarter or $1,800 per year, and the process is complicated and time-intensive,
similar to the requirements of a small business. There are multiple steps
involved, including filing an application with the state for a Federal
Employment Identification Number and submitting forms to confirm the
prospective employee is eligible for work. Next, payroll needs to be set up
and provisions made to pay Social Security taxes and keep track of tax
deductions, medical benefits and other insurance. And then parents have to
keep up with tax filings for multiple agencies.
“It is a ton of extra work for parents already pressed for time and
energy-deprived. Fortunately for parents, there are online services that
relieve much of the burden. Today, you can literally run payroll from your
phone just about anywhere with some services,” said Alter. “Not only are the
right services cost-effective, but they can also provide peace of mind
allowing parents to solely focus on the most important thing – their child.”
Below is a quick list of nanny tax burdens a parent could expect an online
payroll provider to handle:
*Paying the nanny either with direct deposit or by check – there’s no
additional fee for either.
*Collecting and paying all Social Security, Medicare, FUTA and other
*Completing all Nanny Tax paperwork including a 1040-ES four times a year
and a signature-ready Schedule H with your annual 1040.
*Providing a W-2 at the end of the year that the nanny can access online
Parents who have not yet filed their nanny payroll taxes should be sure to
seek guidance from an accountant or payroll professional.
For more information: www.SurePayroll.com. Be sure to join us socially:
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SurePayroll is a wholly owned subsidiary of Paychex, providing an easy,
online, convenient payroll service that keeps our small business customers in
control. SurePayroll also offers efficient online solutions for managing
401(k) plans, health insurance, workers’ compensation, employee screening and
more. For accountants and banking partners, SurePayroll provides private-label
and co-branded services that enable them to offer online payroll processing to
their small business clients. The company has received numerous prestigious
awards for its innovative technology, and outstanding customer service and
sales teams, including recognition from PC Magazine, Accounting Today, the
American Business Awards and many others. For more information, please visit
Paychex, Inc. (NASDAQ:PAYX) is a leading provider of payroll, human resource,
and benefits outsourcing solutions for small- to medium-sized businesses. The
company offers comprehensive payroll services, including payroll processing,
payroll tax administration, and employee pay services, including direct
deposit, check signing, and Readychex®. Human resource services include 401(k)
plan recordkeeping, section 125 plans, a professional employer organization,
time and attendance solutions, and other administrative services for business.
A variety of business insurance products, including group health and workers'
compensation, are made available through Paychex Insurance Agency, Inc.
Paychex was founded in 1971. With headquarters in Rochester, New York, the
company has more than 100 offices serving approximately 567,000 payroll
clients as of May 31, 2012. For more information about Paychex and our
products, visit www.paychex.com.
Jon Temerlies, 202-349-0859
Lori Bolas, 224-223-2334
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