Domestic Household Employee

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Stephanie2023
Stephanie2023 Member Posts: 1 Newcomer
edited January 15 in Filing my taxes

Hi!

I am considering a nanny position. Would I be paid as a domestic household employee or what is the best way to get paid and file taxes?

Thank You!

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Answers

  • RoseG
    RoseG FreeTaxUSA Agent Posts: 3
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    Hello!

    How you would be paid depends on your agreement with your client, your relationship, and the amount you are paid. Generally, nannies (independent of an agency) fall under household employees, but you might be considered a contractor/self-employed in some situations. The distinctions that separate those two classifications are behavioral, financial, and the type of relationship. What this means is that If you are hired by someone to do household work, and they (your employer) are in control of what work you do, the time you do it, and your pay, you would be a household employee.

    As a household employee, if you are paid $2,600 or more (in 2023), your employer should provide you with a W-2 form. This form will have withholding information you will use when you file your tax return.

    If you are self-employed, meaning you control your work and time and provide your own resources/tools, you may be given a 1099-NEC/1099-Misc form instead. This form will not list your tax withholdings because your employer is not required to withhold income, SSN, or Medicare tax. If this is your classification, you may need to make estimated tax payments to offset the tax liability at the end of the year. Typically, your estimated tax payments are going to be based on your total income for that tax year.

    If you choose to take the nanny position, you may want to clarify with the client/employer the specifics of the job. You can find more information on this from the IRS here:

    https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee