Do You Owe Nanny Taxes This Year? Find Out Now!

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woman calculating money | what to know about nanny taxes

If you have a nanny, or even a favorite babysitter you call all the time, you might have to pay taxes for using their services.

Bet you didn’t know that, right?

Neither did we, but according to federal and state tax laws, if you paid them $2,100 or more last year, you owe taxes, and they’ll have to report their earning on their own taxes.

All those date nights and last-minute plans that require a babysitter really add up. If you check your Venmo or PayPal records and their payments are less than $2,100 then you’re good and don’t have to worry about Nanny Taxes. But if you find that you did use your go-to babysitter more often than you thought, then you’ll have to state that on this year’s taxes.

What Are Nanny Taxes?

You might be saying to yourself, “But I don’t even have a nanny, so why should I pay taxes for my babysitter [or caregiver]?”

Even if you don’t have a dedicated nanny watching your kids all the time, your reliable babysitter (or caregiver) still needs to report the money you provided them throughout the year, and you have to state that on your own taxes, too – BUT only if it translates to $2,100 or more for last year.

So, what are Nanny Taxes exactly?

Nanny taxes are a combination of both state and federal tax requirements that include: Social Security and Medicare taxes, Federal income taxes and State income taxes. The taxes you’ll have to pay are Social Security and Medicare taxes and State and Federal unemployment insurance. If you were to handle this process on your own, you’d have to figure out how much to withhold for certain federal and state taxes, invoice them, have a running excel sheet of that amount each time you pay them and then figure out how to report them on your own taxes, while also sending out the same to your babysitter at the end of the year.

What To Do If You Did Pay More Than $2,100

First, don’t panic, mama.

Second, take a deep breath and let Care.com HomePay help so that you’re not caught off guard for tax season. Dealing with tax stuff can be super confusing, especially if you’re not a numbers person. To take the guessing work and the stress out of it all, HomePay aims to streamline the process so that it’s easy and convenient.

Care.com HomePay is the leading provider for nanny and tax payroll services, serving 60,000 families over the past 25 years. Since 1992, HomePay has filed over $2 million in tax filings and processed over $4 billion through their payroll services. They are highly rated with 96% of their customers recommending their services.

Trying to figure out nanny taxes on your own can be challenging and add additional headaches if you’re not a numbers person. That’s where HomePay comes in handy! They set up the payroll process for your nanny or caregiver and will keep track of all necessary federal and state tax information. So, when it’s time for tax season, they’ll provide you with a report that you give to your tax person to send to the state and the IRS. Then, they’ll also send a W-2 to your nanny so you don’t have to do anything! Plus, if you have any questions throughout the year, you simply reach out to HomePay’s customer support and they’ll help find a solution to your problem.

Call them today at 877-367-1976 to get your Nanny Taxes squared away and have peace of mind this tax season.

Disclaimer: We have partnered with Care.com HomePay to bring you this sponsored post on how to navigate nanny taxes.

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Born and raised in Los Angeles, Kristie moved to Corona six years ago after her husband accepted a position in a neighboring city. Since then, she’s been able to create quite an extraordinary life in this wonderful city she calls home. As a work-from-home mom of three littles (Mason 4, Kingston 3 and sweet baby Juliette 3 months), Kristie is one busy momma! Life is non-stop for this momma, but she wouldn't have it any other way. The UCLA graduate is a writer/journalist/social media and communications coordinator by trade, but a momma and wife 24/7. When she’s not working and has a much-needed break from her kids, she enjoys reading, writing, wine, fitness and living life to her fullest! You can catch up with her everyday life on IG @therealmommychronicles!