Question

We didn’t give our nanny a 1099 or W-2… Are we required to do so?

Answer

Babysitting taxes might be on your mind if you have children. If you’re wondering if you should give your in-home babysitter or nanny a 1099-MISC or W-2, you first need to determine if the babysitter(s) are self-employed or household employees.

Babysitting Taxes 101: Is Your Sitter a Household Employee?

If you control how the work is performed, the babysitter is a household employee. If the babysitter controls how the work is performed, the babysitter is self-employed.

Note: In many cases a babysitter/nanny providing regular services in your home would be an employee. However, if an agency provides the worker, controls what work is done and how it is done, the worker generally isn’t your employee.

Babysitting Tax Forms

Form 1099 for Nannies Who Are Self-Employed

Self-employed workers usually provide their own tools. They offer their services to the general public in an independent business.

If a babysitter or nanny is self-employed, you don’t have reporting or withholding requirements. The babysitters still must report their income to the IRS. The babysitters still must report their income to the IRS. However, you don’t need to issue a Form 1099-MISC or withhold taxes. This is because you aren’t paying the babysitter in the course of your trade or business. Payments are a personal expense.

W-2 For Babysitters Who Are Your Employees

If the babysitter is your employee, you generally must provide a Form W-2 if one of these is true:

  • You paid the employee at least $2,300 in during the tax year.
  • You paid the employee wages of any amount, and you withheld federal tax.

If you meet one of those rules, you generally must issue a W-2 regardless of the age of the babysitter. For more details and exceptions for when W-2 reporting is not required, see “Household Employment Taxes” and “Nanny Tax Guide”.

Complete a Form W-2 and give copies B, C, and 2 to the employee. Send the W-2, copy A with the W-3 to the Social Security Administration by the last day of January. To file these forms, you’ll need a Tax ID.

If you don’t meet these requirements, you’re subject to civil penalties. You can reduce the penalty by filing the required forms within 30 days of the deadline. The deadline is typically at the end of January.

More Help On If a Nanny Get a 1099 or W-2

Babysitting taxes for your in-home help can get complex. Make an appointment with one of our knowledgeable tax pros to help you complete your Form W-2 or 1099 for nanny and in-home childcare.

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