COVID 19 is closing schools, changing how we work and live, and disrupting plans for families across America. Trying to navigate childcare and remote learning is making these stressful times even more challenging. Are you hiring household help to manage online learning at home? Or a nanny to watch the kids so you can work remotely? Are you forming a learning pod or a nanny share? We are here to answer your payroll and tax questions and help make this difficult process more managable.
As you consider next steps, below is some information for household employers which may be helpful; each employment situation is unique so please call us at 877-626-6924 for a free consultation:
All employees, with very limited exceptions, require wage reporting and taxes to be withheld. It's easy to think workers who don't fit the typical 9 to 5, traditional employment arrangement don't need to have taxes withheld or get a W-2 at the end of the year, but that is not the case. Even part-time household helpers and many short-term workers who are assisting with the kids at home need to have their wages reported and taxes withheld.
Any employee who earns $2200 in 2020 should have Social Security and Medicare taxes withheld. Other employee/employer taxes may be required at lower earnings thresholds. Regardless of employment duration, most household employees require a year-end W-2 and the employer similarly needs a Schedule H for their own year-end tax return. In many states, workers’ compensation insurance is required even if the employee will only be working part-time or for a few weeks or months.
Generally, wages are reported and taxes are paid on calendar quarters so workers who are helping cover during a quarantine period or shutdown until schools reopen may require 2 (or more) quarters of tax filings. Employers should keep these periods in mind when deciding employment periods and payroll dates:
Quarter 1: Jan-Mar
Quarter 2: Apr-Jun
Quarter 3: Jul-Sept
Quarter 4: Oct-Dec
Every state and locality is different when it comes to laws regarding domestic employment. Please contact a NannyChex tax specialist for more information on your specific circumstances.
NannyChex offers exceptional payroll and tax solutions for household employers. Our unique pay as you go system ensures that you will only pay for the employment activity that you have. We also offer free registration and no cancellation fees, so you will not have any surprise fees or be forced to endure burdensome hidden charges. We are acutely aware of the challenges families are facing with COVID and we are here to help.