How are the nannys (employees) payroll taxes paid?
The household employer is required to collect the employee’s (nanny, housekeeper, etc.) contribution to Social Security and Medicare taxes. Should you fail to collect, you remain responsible to remit these taxes for the employee. The Internal Revenue Service (IRS) collects the nanny payroll taxes. They are summarized annually on the family (employer’s) Form 1040 Schedule H – an attachment to the family’s personal federal income tax return. The nanny payroll taxes are added to the family’s personal income tax liability. Most families with full time staff will make quarterly payments of the nanny payroll taxes using 1040ES estimated tax payment coupons. This protects the family from substantial underpayment penalties at year end should the total family income tax + nanny payroll tax liability be too large. Deducting federal income taxes and most state income taxes is optional. When income taxes are not withheld by the employer (family), then the employee (nanny, housekeeper, maid) is req
