It's officially summer and many families will be hiring a nanny or other short-term employee for summer employment. All employees, with very limited exceptions, require wage reporting and taxes to be withheld - this includes summer nannies, part-time workers, seasonal employees, and similar workers who don’t fit the typical 9 to 5, year-round arrangement that people generally think about when it comes to payroll taxes.
Any employee who earns $2400 in 2022 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 also require a year-end W-2 and the employer similarly needs a Schedule H for their year-end tax retrn. In many states, workers’ compensation insurance is required even if the employee will only be working for a few weeks or months.
Generally, wages are reported and taxes are paid on calendar quarters so “summer” nannies may actually require 2 (or more) quarters of filing. 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 locality and state is different when it comes to laws regarding short-term and seasonal employment. Please contact a NannyChex tax specialist for more information on your specific circumstances. NannyChex offers exceptional payroll and tax solutions for household employers. Sign-up now and discover the NannyChex difference!