DIY Software for Nanny Payroll

[Anonymous]

Hi there,

We have hired a nanny who resides in MD and will work in DC. We have agreed to withhold the nanny's share of federal and state taxes. I am planning on using the NannyPay software to help manage everything, but if you have done this before I would appreciate insight.

From the federal standpoint things are fairly simple, but we are running into issues at the state and local level. First, I understand we will be responsible for paying DC unemployment tax as her employer, but do we need to withhold anything from her checks for unemployment tax? If so, is this under DC or MD law? Second, the software has inputs for state and local tax rates, do we need to withhold for state and [i]local rates? The MD website is confusing because it says that local taxes are owed but that they are collected as part of the state tax as a convenience to the localities. I don't want to "double withhold" from the nanny for state and local if it is not required.

Thanks for your help.