A household employer is defined as someone who pays an individual to perform duties
in or around their home. Household employees include nannies, senior care providers,
private nurses, housekeepers, gardeners, cooks, personal assistants, household managers,
NOTE: It is a fairly common misperception – even among some general tax professionals
– that household workers can be classified as “independent contractors.” If you
ask around, you’ll very likely hear someone say “just 1099 her.” (Form 1099 is the
form used to report money paid to an independent contractor).
Beware: This is illegal and can result in big, expensive
problems with the IRS. (See “The
If a family pays a household employee $1,800 (2013) or more in a calendar year,
they are required to meet the “nanny tax” obligations (a list of these obligations
is provided under “The
Household Employer’s Tax Responsibilities”) as well adhere to local, state
and federal employment laws (see “The
Household Employer’s Legal Responsibilities”). Don’t worry, these obligations
are not nearly as onerous or as expensive as most people think.
If a family pays an employee less than the $1,800 threshold, the family is absolved
of the “nanny tax” obligations, but they are still considered an employer and must
adhere to local, state and federal employment laws (see “The
Household Employer’s Legal Responsibilities”).