Paying Babysitter/housekeeper legally

Deep Blue

Wed, Feb 01 2023, 6:55 pm

Here is a list of taxes you need to worry about:

15.3% social security and medicare tax
Half the tax is withheld from the babysitters pay and you remit and file on your personal tax return (schedule H).

0.6% federal unemployment tax, also on your personal tax return.

Income tax withholding and w2 reporting is not required although you should give some type of alternative to the babysitter to let them know how much to report on their tax return.

State Unemployment - New York requires paying and filing (approx. 4.1%) every quarter on form nys-45, other states such as NJ require annual filing

State disability insurance - each state is different, NY exempts babysitters that work less than 20 hours a week

Workers Comp - each state is different, NY exempts if the babysitter worked less than 40 hours a week, NJ has no exemption, but your homeowners insurance probably has a rider covering babysitter workers comp

BTW by being legal you will be able to get the childcare tax credit and also you can include the taxes you pay for purposes of the childcare tax credit