Community› The Bump Month Clubs› February 2012 Moms
February 2012 Moms
New Discussion

XP - Nanny vs. DCP - Taxes?

MrMrsandBabyMrMrsandBaby member
in February 2012 Moms

I've been confused on this for a while...I take my daughter at a licensed in home daycare.  Every week I write a check to the DCP and go on my merry way.  I didn't ask about taxes when we interviewed her, it honestly didn't occur to me!  Should I be worried about it or not since DD isn't her only child there?

Alternatively, DH and I are considering another DCP who again is out of her home but DD would be the only child.  Is that a "nanny" that I need to pay taxes on?

So confused!
Lilypie - (JrNi)

Lilypie - (y35Q)

Report Reply to Post

Re: XP - Nanny vs. DCP - Taxes?

  • Jen0204Jen0204 member
    Like a sales tax? I have no idea if that's required, but if it is that's her responsibility to charge you. If she is required to submit sales tax to the government and doesn't they would go after her to collect it, not you. Have you ever had a store/person say they'll charge you less if you pay cash so they can avoid claiming it and paying taxes? If the government found out they would go after that business/individual to collect the tax, not you. This is the same concept.
    Warning No formatter is installed for the format bbhtml
    Report Reply
  • Loading the player...
  • mkarnsmkarns member
    Agree with PP. I think she pays her own taxes. You don't need to worry. If you were to get a nanny, I think the only way you would need to worry about taxes would be if you wanted to consider her an employee?

    My Colton...Growing up so fast!

    image

    And Coralee, his baby sister...On the way!

     BabyFruit Ticker

    Report Reply
  • preggersINschool25preggersINschool25 member
    My friend nannies.  She (not the mom) gets charged taxes at the end of the year because nothing was withheld (like it would have been if she worked a regular job).


    BabyFruit Ticker
    Baby Birthday Ticker Ticker
    Report Reply
  • Sept07b2bSept07b2b member

    All household workers who you hire and have some level of control over must be treated as employees.  This means, as the employer, you are responsible for paying taxes, such as Medicare and Social Security taxes on behalf of your employee.  The employee will be responsible for paying their share of these taxes, as well as income tax on any money they make.  Many states also require employers of nannies to carry workers compensation insurance or pay into unemployment insurance.  See the link below for a great resource on determining taxes and nannys.

    https://www.irs.gov/pub/irs-pdf/p926.pdf 

    This is different than if you send your child to an in-home daycare.  Presumably, most in-home daycares are licensed as an in-home daycare and as a business.  As such, they are responsible for paying business taxes and are not your "employee," so you have no obligation to pay any federal or state taxes on their behalf as an employer. 

    I would think that even if your in-home provider isn't licensed or set up as a business, if they are caring for your baby in their own home, they may not be considered an "employee," since you will not have as much control over what they do as you would if they were caring for your child in your own home, but that distinction is not entirely clear, and is a somewhat difficult question from a tax/common law perspective, so it might be best to speak with the in-home provider and see what she considers herself from a tax perspective. It also might be helpful to speak with an accountant. 

     Hope this helps! 

    Baby Birthday Ticker Ticker
    Report Reply
  • MrMrsandBabyMrMrsandBaby member
    imageSept07b2b:

    All household workers who you hire and have some level of control over must be treated as employees.  This means, as the employer, you are responsible for paying taxes, such as Medicare and Social Security taxes on behalf of your employee.  The employee will be responsible for paying their share of these taxes, as well as income tax on any money they make.  Many states also require employers of nannies to carry workers compensation insurance or pay into unemployment insurance.  See the link below for a great resource on determining taxes and nannys.

    https://www.irs.gov/pub/irs-pdf/p926.pdf 

    This is different than if you send your child to an in-home daycare.  Presumably, most in-home daycares are licensed as an in-home daycare and as a business.  As such, they are responsible for paying business taxes and are not your "employee," so you have no obligation to pay any federal or state taxes on their behalf as an employer. 

    I would think that even if your in-home provider isn't licensed or set up as a business, if they are caring for your baby in their own home, they may not be considered an "employee," since you will not have as much control over what they do as you would if they were caring for your child in your own home, but that distinction is not entirely clear, and is a somewhat difficult question from a tax/common law perspective, so it might be best to speak with the in-home provider and see what she considers herself from a tax perspective. It also might be helpful to speak with an accountant. 

     Hope this helps! 

    Perfect!  Thanks for the link, exactly what I needed!

    Lilypie - (JrNi)

    Lilypie - (y35Q)

    Report Reply
This discussion has been closed.
Choose Another Board
Search Boards
"
"