Nanny services help parents take care of their children, Elderly parents and disabled loved ones. However, adding a household employee makes you responsible for some taxes to be paid to the Internal Revenue Service (IRS).
Schedule H is the form that needs to be filed. All applicable taxes such as social security, unemployment and other federal and state taxes will also need to be paid. Failure to file Schedule H (household employment taxes) and payroll taxes can result in large fines.
If you have a household employee and if they do any of the following tasks, taxes must be withheld and paid to the appropriate federal and state agencies.
• Domestic workers
• Health aides
• Private nurses
• Yard workers