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February 26, 2021
Question

Nanny

  • February 26, 2021
  • 1 reply
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I paid a nanny for the last 3 months of 2020, the total payment was less than $2000. Did I need to pay taxes on that? Was there any paperwork I should have filled out?

    1 reply

    ColeenD3
    March 2, 2021

     No, you don't have to give her a W-2, but you do have to pay FUTA.

     

    You must file Form W-2 for each household employee to whom you paid $2,200 or more of cash wages in 2020 that are subject to social security and Medicare taxes. If you paid your nanny $2,200 or more in 2020, you should withhold and pay Social Security and Medicare on all of her wages. If you paid your nanny $1,000 or more in a quarter in 2020, you must pay the federal unemployment tax, or FUTA. (You may also owe state unemployment taxes.)

     

    You can do this on Schedule H in the program. 

     

    1. Search for household employee taxes, sch h (use this exact term including the comma and space).
    2. Select the Jump to link at the top of the search results

     

    Generally, for 2020 an employer needs to pay Social Security and Medicare taxes for “cash wages” of $2200 or more paid to any one employee. Cash wages refer to checks, money orders and the like. They don’t include “the value of food, lodging, clothing, transit passes and other noncash items you give your household employee.” But cash given to an employee in place of those items counts as cash wage.