IRS Directly Receives Some 21 Million W-2s This Year in Effort to Fight Tax Fraud Household employers should know they are obligated to file Forms W-2 and W-3 concerning wages paid to their nannies with the Social Security Administration, and not with the IRS. Nevertheless, some large payroll providers are participating in a pilot program by which some 21 million employees’ W-2s were provided this year directly to the IRS, in addition to the SSA, in an effort to assist the IRS in detecting tax fraud based upon refunds claimed on false individual income tax returns with improperly obtained or [...]
Paid Time Off Reminder Employers are responsible to pay accrued vacation and sick time when a nanny leaves. Vacation pay, holiday and sick time, also known generally as Paid Time Off or PTO, is a common benefit provided by household employers to their nannies and other domestic help. It is important, however, to clarify in writing at the start of the employment relationship how much PTO a nanny gets, how and when it may be used and, most importantly, how PTO is accrued during the year (e.g., all at once or pro rata over the year). Although some states’ labor [...]
Let's face it we're all busy, in fact most of us are too busy for our own good. When it comes down to it juggling not only a work schedule but family and individual child schedules it is not easy. It should come with a user manual or a how to for working parents with kids in school and after school activities and a nanny. Keeping an accurate, synced and organized calendar is something to shoot for and we want to help. So how do organized families keep it all straight? We turned to the internet for these two answers [...]
Household employers were required to provide their employees a Form W-2 for wages paid to them in 2015 by February 1st. If you haven’t already done this yet, you should so so immediately. Paper filers are reminded that Copy A of all your Forms W-2, along with a Form W-3, by February 29th. If you miss that deadline for some reason, you can file electronically by March 31st and still not be considered late. This will be the last tax year in which the IRS will offer this “electronic filing extension”. President Obama recently signed legislation that will require all [...]
Reminder to Update Your State Unemployment Tax RatesIf you are using NannyPay to withhold employee unemployment insurance (UI) taxes, or to estimate your liability for employer contributions, be sure to update your rates in NannyPay for 2016. Because these rates vary by state and by employer, these are user-configured settings which you must update yourself to reflect any changes in rates for 2016.
Holiday time is approaching and you may be considering offering your nanny or other household employee a cash bonus. You have two options (aside from just giving her the cash), either cut your employee a separate bonus check or include it with their regular payroll. Here's how to pay your bonus using NannyPay2 for each scenario. Scenario 1: You want to give your employee a separate bonus check. Step 1: Make sure you are using the the most recent version of NannyPay2. If you are unsure, click "Check for Updates" under the "NannyPay2" menu (Mac) or the "Help" menu (Windows). [...]
Are you thinking of providing a gift to your household employee for Thanksgiving? Autumn table setting with pumpkins. Thanksgiving dinner and autumn decoration. If so, you are not alone. A recent survey of employers revealed that upwards of 26% of employers will provide some form of Thanksgiving gift this year to their employees, an historically high percentage. But is that gift taxable? In general, under IRS guidelines, if the value and frequency with which the gift or benefit is provided is so small as to make accounting for it unreasonable or impractical, it’s not taxable. This is what [...]
District of Columbia employers should note that the unemployment taxable wage base will be $9,000, effective December 1, 2016. Many other states are likewise raising their UC wage bases for tax year 2016. NannyPay customers should remember to change the UC settings in the software to reflect these changes before the first pay period in 2016 to insure their withholdings are correct.
A recent review of federal court filings as of August, 2015, demonstrates a substantial increase in the number of Fair Labor Standards Act (FLSA) civil filings compared to the same period last year. If the rate continues, it would be the largest number of FLSA civil cases since the fiscal crisis of 2008. Generally speaking, the FLSA requires employers of hourly wage earners, such as nannies, to pay overtime pay to those employees who work more than 40 hours in a week. Household employers who pay “under the table”, incorrectly classify their nannies as independent contractors, or who do not [...]
Most times, household employers run afoul of the law by paying their household help “under the table” and not withholding the proper employment taxes. But by paying your nanny legally, and withholding taxes from her pay, creates a trust relationship between you and the government with regard to those withheld taxes. If you withhold employment taxes, and then fail to pay those taxes over to the government, you likewise face substantial liability as a “responsible person” under federal (and most states’) tax laws. In US v. Hastings (W.D. Mo. 2015), a bookkeeper for a small business who willfully failed to [...]