You'll also, of course, have to pay the underreported taxes, plus interest which currently stands at 8 percent but is subject to change each quarter. In fact, Kavanagh and other industry insiders say their biggest problem these days is keeping up with demand. Figuring out whether you owe nanny taxes or not is simple. And you must file for an employer identification number EIN with both the federal and state governments. If the tax rules leave you a bit breathless, don't sweat it. As a result additional time was needed to file the reports.

Take note that if your household employee cares for your dependent who is under age 13 or your spouse who is unable to provide self-care so that you may work, you may be eligible for the Child and Dependent Care Expenses tax credit. File on the Internet Get Your State Refund Within a Week. These forms fill in the blanks on pre-printed forms, except for the ones you can view. Also, Kavanagh noted, sit down with prospective nannies and interview them yourself. Read Attached Instruction Sheet Before Preparing Form. And, like most agencies nationwide, you'll have to pay those fees all over again if you wait too long to request a replacement. The penalties for failing to meet your tax obligations as an employer can be stiff. You are also responsible for collecting your nanny's share of those taxes. This appeal arises out of a contract between the U. Remember, that's on top of the weekly salary you're paying your nanny.