J.K. Lasser's Your Income Tax 2014: For Preparing Your 2013 Tax Return

Chapter 38

Household Employment Taxes (“Nanny Tax”)

38.1 Who Is a Household Employee?

38.2 Social Security and Medicare (FICA) Taxes for Household Employees

38.3 Filing Schedule H To Report Household Employment Taxes

38.4 Federal Unemployment Taxes (FUTA) for Household Employees

If you employ someone to care for your children or a disabled or elderly dependent in your home, clean your residence, cook, or provide other personal services in or around your home, you may be obligated to pay and withhold Social Security and Medicare (FICA) taxes and also to pay federal unemployment (FUTA) taxes.

The reporting requirements for FICA and FUTA are discussed in 38.2 and 38.4.

38.1 Who Is a Household Employee?

If you hired someone to do household work in or around your home and you were able to control what work he or she did and how it was done, you had a household employee. This could include a babysitter, house cleaner, cook, nanny, yard worker, maid, driver, health aide, or private nurse. Unless an exception applies (see below), such a worker is your employee regardless of whether the work is full or part time or whether you hired the worker through an agency or from a list provided by an agency or association. Also, it does not matter if the wages were paid for work done on an hourly, daily, weekly, or per-job basis.

If a worker is your household employee, you may have to withhold and pay Social Security and Medicare taxes (FICA, 38.2) and pay federal unemployment tax (FUTA, 38.4) ...