Q. I've read several discussions on this site, but I am still confused. Assume a household nanny works in New York for less than a calendar quarter and makes about $700-800. As an employer, I do not need to withhold SS or FICA. I also do not need to pay FUTA. However, I do need to pay NY state unemployment taxes. At the end of the year, what do I provide the nanny? I know do not provide a W2 because I did not withhold SS or FICA. I also know I do not provide a 1099 as the nanny does not qualify as an independent contractor. Since the nanny's wages were reported to NYS, I assume I need to provide the nanny some type of report regarding the nanny's wages. So what should I do?
A.1:Correct; as long as your household worker is an EE, then you, as the ER, may be required to comply with various payroll tax requirements. For the year 2012, one important threshold amount is $1,800. If you paid your EE, this amount or more during the year, you are generally required to
pay social security taxes on your worker’s behalf. The FUTA states that you must pay the federal government 6 percent (actually 0.8% if you pay by April 15 of the following year.)of the nanny's first $7K of earnings. if you pay at least $1K in any quarter of the current calendar year or the preceding year.
Read more: http://www.asktaxguru.com/8131-when-is-a-w2-required-household-employee.html
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