Nanny Share Payment - if the other family handles payroll, how to handle FSA dependent care?

[Anonymous]

Hi All, We're working through creating a contract for a nanny share. We have a fixed budget that we can afford to pay, so we're contributing our fixed amount each month, just under half of the total cost, and the host family pays the balance. The nanny's hours will include overtime. It seems the easiest way to do this is for us to transfer our amount to the host family, and then they work out the fine print for each month's hours, etc.

Our concern is about using the $5,000 we've set aside in our FSA. The paperwork seems to just ask for the name and SS# of the provider (nanny). Has anyone else had an arrangement like this before? Any suggestions?

Thank you!

[Anonymous]

I don't know if you can do that if you are getting a refund from FSA. I have submitted refund requests from FSA before. You have to submit paperwork showing that you paid X amount to your provider, and your provider has to sign the paperwork as well. Why don't you just set up a payroll service for yourself? Are you paying taxes?

[Anonymous]

All you need to submit to FsA is the signed claim form from the nanny certifying that you paid her. You can use FSA money for camps, babysitting, all sorts of things that have no tax implications. Unlike the medical FSA you don't any sort of "official" receipt.

[Anonymous]

Anonymous wrote:All you need to submit to FsA is the signed claim form from the nanny certifying that you paid her. You can use FSA money for camps, babysitting, all sorts of things that have no tax implications. Unlike the medical FSA you don't any sort of "official" receipt.

This.

[webbkathy]

OP what you are doing vis a vis the taxes appears to be incorrect FYI.

See http://www.homeworksolutions.com/nanny-shares-how-do-we-handle-the-taxes-if-we-share-a-nanny-with-another-family/