What Does the Employer Need to do to Pay Nanny Taxes?

Register as an employer: You need both federal and state tax identification numbers to report and pay your nanny taxes. You get your federal employer identification number (FEIN) from the IRS and will use this number to obtain your state identification number from the appropriate tax agency in your state.

Payroll info: You need to accurately calculate your employee’s gross pay, calculate the amount of taxes to withhold from her pay, and track the corresponding employer taxes each pay period. (Use our nanny tax pay calculators to help.)

Filings:

You should file state tax returns, typically on a quarterly basis although some are filed monthly or annually.

You may send estimated federal tax payments to the IRS four times per year.

Forms:

You must provide your nanny with a Form W-2 by the end of January each year.

You need to file any required year-end forms with the state, as well as Form W-3 and Form W-2 Copy A with the Social Security Administration.

You need to prepare a Schedule H and file it with your federal income tax return.