Holiday pay for Nanny

[Anonymous]

Question, we are ending our nannyshare early because one family is moving. Our beloved nanny gets 10 vacation days a year. She hasn't taken any of them. We agreed to pay her out for the days she has earned thus far. (7 days) Should I pay her the lump total with taxes taken out or as a gift tax free? (to be clear, i am only paying my share of the days) I am leaning towards tax free. Is this normal?

[Anonymous]

No one knows what's normal. Legally you should have it taxed.

[Anonymous]

Give it as a gift and call it a day.

[Anonymous]

Follow the law.

[Anonymous]

Do what you want.

[Anonymous]

Do what you want.. Our taxes go to fatass Government officials anyways.

[Anonymous]

Anonymous wrote:Do what you want.. Our taxes go to fatass Government officials anyways.

And IRS "conferences" featuring Wolfgang Puck.
Who's a dumbass now?

[Anonymous]

Pay her for the 10 (call it a parting bonus) in cash, tax free.

[Anonymous]

Legally, you should withhold taxes and treat the vacation pay as compensation for payroll tax purposes. The same is true of bonuses paid to nannies. That said, enforcement is unlikely, so what you do really depends on how important it is to be fully compliant with the law.