is nanny a statutory employee? RSS feed

post reply Forum Index » Employer Issues
[Post New]03/31/2013 19:23
quote
Anonymous
Hello, MB is here. I have a question about nannies taxes for this forum

Our nanny called me today and said that her accountant advised her to ask us to check of a box on the W-2 we gave her that she is a statutory employee (box 13). We checked it out on line and it looks like statutory employees are independent contractors who nevertheless get W-2. That way she will not have to pay any income tax. We have already paid her and our share of social security as well as FUTA. Reading online about it, I am surprised that this advise is coming from an accountant. Are you declaring your nannies as statutory employees?

Thanks!
[Post New]03/31/2013 22:10
quote
Anonymous
Just tell her no, unless she has a "significant investment" in the materials she uses to do her work.
If you like, you can ask her (or she can ask her accountant) to write you an explanation for her request.
[Post New]04/01/2013 02:22
quote
Anonymous
I'm a nanny and I've never heard of a nanny being declared statutory employee
[Post New]04/01/2013 07:29
quote
Anonymous
OP here. Thanks a lot both of you. Upon reading some more online, it seems pretty certain that nannies are not statutory employees. I will offer our nanny to call IRS together today and use their advice as a guide for action
[Post New]04/01/2013 10:15
quote
Anonymous
This doesn't make sense to me (I'm an MB). Our nanny is an employee, period. The laws are quite clear that she is not an independent contractor. I think she's getting incorrect information.
[Post New]04/02/2013 12:45
quote
webbkathy

Member Offline
OP the answer is NO, nanny is not a statutory employee.

Personal income tax preparers - whether they hold a CPA, EA or just a registered income tax preparer - typically are not well versed in payroll taxes and payroll reporting.

By the same token, although I AM a registered income tax preparer (I need the certification for what I do), and I am a subject matter expert on household employment taxes and reporting, if you gave me a Form 1040 Schedule F to prepare, I would have to pull out the book and study up on it to get it right.

Moral of the story, being an accountant does not make you an expert on the entire US tax code . We all have our areas of expertise.
Kathy Webb
HomeWork Solutions Inc.

http://www.HomeWorkSolutions.com
800.626.4829

Simplifying Nanny Tax Compliance Since 1993
[Post New]04/08/2013 14:40
quote
Anonymous
Isn't this question also tied to how many hours they work in your home and if exclusively with you?
[Post New]04/09/2013 13:24
quote
Anonymous
Anonymous wrote:Isn't this question also tied to how many hours they work in your home and if exclusively with you?


She is a FT with our family and works for us only
[Post New]04/09/2013 13:26
quote
Anonymous
webbkathy wrote:OP the answer is NO, nanny is not a statutory employee.

Personal income tax preparers - whether they hold a CPA, EA or just a registered income tax preparer - typically are not well versed in payroll taxes and payroll reporting.

By the same token, although I AM a registered income tax preparer (I need the certification for what I do), and I am a subject matter expert on household employment taxes and reporting, if you gave me a Form 1040 Schedule F to prepare, I would have to pull out the book and study up on it to get it right.

Moral of the story, being an accountant does not make you an expert on the entire US tax code . We all have our areas of expertise.


Thanks! and perhaps then not an expert accountant should not charge for this advice which was leading us down an incorrect and illegal path?
[Post New]04/20/2015 11:43
quote
Anonymous
I am a Nanny for a family with parents who work odd hours and it works better for me to pick up the children and bring them to my house. I purchase & prepare their meals, pay for field trips we go on, buy a lot of toys & supplies and do projects (costly ones at that) for the parents for Valentine's Day, Easter, Mother & Father's Day & Christmas. There are 3 children so the expenses add up and feel that this should be taken into account when my AGI is calculated for taxes and Healthcare Credit. I was advised by 1 IRS agent (on the phone) that I should look into changing my status to "Statutory Employee" so that the expenses can be considered. Is this inaccurate?
[Post New]04/20/2015 12:21
quote
Anonymous
OP, if nanny is asking you to simply check and box and it would reduce the amount of taxes she owes why would you not do that for her? Are you trying to spite her or be passive aggressive??
[Post New]04/20/2015 12:27
quote
Anonymous
webbkathy wrote:OP the answer is NO, nanny is not a statutory employee.

Personal income tax preparers - whether they hold a CPA, EA or just a registered income tax preparer - typically are not well versed in payroll taxes and payroll reporting.

By the same token, although I AM a registered income tax preparer (I need the certification for what I do), and I am a subject matter expert on household employment taxes and reporting, if you gave me a Form 1040 Schedule F to prepare, I would have to pull out the book and study up on it to get it right.

Moral of the story, being an accountant does not make you an expert on the entire US tax code . We all have our areas of expertise.

Are nannies the only ones who you declare can never be independent contractors, under any circumstances? Doesn't IRS have a criteria list you have to meet?
[Post New]04/20/2015 12:36
quote
Anonymous
Anonymous wrote:I am a Nanny for a family with parents who work odd hours and it works better for me to pick up the children and bring them to my house. I purchase & prepare their meals, pay for field trips we go on, buy a lot of toys & supplies and do projects (costly ones at that) for the parents for Valentine's Day, Easter, Mother & Father's Day & Christmas. There are 3 children so the expenses add up and feel that this should be taken into account when my AGI is calculated for taxes and Healthcare Credit. I was advised by 1 IRS agent (on the phone) that I should look into changing my status to "Statutory Employee" so that the expenses can be considered. Is this inaccurate?

Exactly. I also used to do part of my nanny job in my house.

INA agency and payroll members are simply hell bent on, "No nanny can ever be an independent contractor." In fact lots of INA nanny members are independent contractors. They're mostly (but not all) the infant care nannies, who have a number of families through the year.

Of course the agencies and payroll outfits are missing major profits for themselves.
[Post New]04/26/2016 10:49
quote
Anonymous
The IRS is not very clear on whether babysitters or housekeepers are statutory employees but yes, they may qualify as such.

When you are babysitter or a housekeeper, you are not an employee in a sense as someone who goes to the office with full benefits, complete with all the withholding taxes - federal, state and local. You do not fill out a W-4 upon hiring as required of regular employees.

You are not an independent contractor either because you do as you are told. Your boss has a say on how things should be done.

Thus, you are a statutory employee.
[Post New]04/26/2016 12:20
quote
Anonymous
Anonymous wrote:I am a Nanny for a family with parents who work odd hours and it works better for me to pick up the children and bring them to my house. I purchase & prepare their meals, pay for field trips we go on, buy a lot of toys & supplies and do projects (costly ones at that) for the parents for Valentine's Day, Easter, Mother & Father's Day & Christmas. There are 3 children so the expenses add up and feel that this should be taken into account when my AGI is calculated for taxes and Healthcare Credit. I was advised by 1 IRS agent (on the phone) that I should look into changing my status to "Statutory Employee" so that the expenses can be considered. Is this inaccurate?


Nannies work in the family home, per the IRS. If you don't work in their home, you aren't a nanny and may not be an employee. If you can figure out which label to use, you'll have better luck with your taxes.
post reply Forum Index » Employer Issues
Message Quick Reply
Go to: 

Search   Recent Topics   Hottest Topics