Anonymous wrote:I would tell her that you need to start paying her on the books, and let her go if she won't agree to it. I would not go back in time because it's pretty obvious you did it on purpose (kind of hard to plead ignorance to not paying employee taxes and workers comp).
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OP is in a precarious situation. She did not pay taxes or have workman's comp insurance and the nanny can report her and file a complaint against her. It makes no difference whether the nanny said she didn't want taxes taken out because this is not a choice for OP as both Federal and state laws are very clear that the employer must take taxes for household employees as they cannot be 1099 employees. She needs to see a tax person and get it straightened out and either pay back taxes, get workman's comp insurance. If this nanny doesn't agree then she gets a new nanny but she still gets legal with present nanny. Otherwise, the sword of Damocles is always hanging over her head.