Morningside Nannies was outstanding. The process was stress free and the caliber of applicants was far superior to that of other agencies. Morningside Nannies was thorough in their review and timely presentation of candidates.
I liked the fact that you screened the candidates before sending them to us, rather than sending the candidate to me before I knew anything about them, like happened with (name withheld), your competition.
I am delighted with the outcome, and enjoyed the process.
Compared to other agencies Morningside presented a higher caliber of candidate.
We put our trust in Morningside to place us with a nanny that was perfect for our family’s needs and Morningside delivered.
In a time crunch you provided me with two excellent applicants within hours!
Objective and professional with an obvious personal touch, small but important comments about each person.
As a new mom I was nervous about hiring a nanny, but now I couldn’t be more pleased. I’ve sung your praises to everyone I know.
We used two other services and an online service. Morningside Nannies had the most highly qualified candidates, one of whom we selected.
I described the person I wanted and that’s what you found for me. Thank you.
Any employer who expects to pay more than the annual wage threshold, $2200 for 2020, to a single employee has legal tax obligations. The employee may be a part-time sitter or a full-time nanny. All employers of all domestic workers are subject to the same regulation.
For your families employing nannies or other household employees who earn $2,200 or more in cash wages in 2020, Social Security and Medicare taxes (commonly referred to as “nanny taxes”) must be paid by the family and the employee. The employment coverage threshold for domestic employees is adjusted periodically for inflation and is up from $2,000 in 2017. The nanny tax threshold does not apply to wages paid to a spouse, child under age 21, parent, or any employee under the age of 18. Social Security and Medicare taxes are 15.3% of cash wages. The employer pays 7.65% (Social Security at 6.2% and Medicare at 1.45%) while the same amount can be withheld from the employee’s pay or the employer can pay their worker’s share and not withhold.
Nanny employers can expect their employer tax obligations to be equivalent to approximately 10% -12% of the nanny’s gross annual salary.
Nanny employers are responsible for withholding and paying Social Security and Medicare taxes (FICA). The employer share of this tax is 7.65% of the employee’s gross wages. The employee’s share of FICA is another 7.65%. You may choose to pay this yourself and not withhold it however submitting payment is the employer’s responsibility.
Nanny employers are responsible for paying the Federal Unemployment Tax Assessment which is based on the nanny’s earnings. This tax caps at less than $45 per year.
Nanny employers are also responsible for state unemployment tax assessments. The tax amounts will vary state to state.
Depending on the state, both nanny employers and nannies may have additional tax responsibilities.
Nannies are responsible for federal and state income taxes. While employers are not required to withhold and submit the nanny’s federal and state income taxes, doing so is industry best practice and can prevent the nanny from incurring large tax bills or payment penalty fees.
There are significant tax incentives for paying your nanny legally. In fact in many cases, the tax savings might actually exceed the employer’s hare of the taxes. Employers who have access to a dependent care or flexible spending account can save several thousands of dollars per year. Even those who don’t have access to such accounts can take advantage of tax credits for child or dependent care, saving parents $600 to $1200 per year, depending on the number of dependents requiring care.
IRS publication 926, “Household Employer’s Tax Guide,” available at www.irs.gov, provides an in-depth review of household employer tax responsibilities.
For paperwork relief, many parents hire a payroll and tax service. The following industry leaders provide free consultations to clients of Morningside Nannies: