I have my first nanny job. Do I have to declare my income on my taxes?
While taxes can be complicated, it’s imperative to declare your taxes for income earned as a nanny. Here are some tips and resources for making sure you and your nanny family are following the law.
I’m a new nanny working 40 hours per week. My nanny family pays me through Venmo. Do I have to declare this income on my taxes? If so, is there anything I need from the family? And how do I approach this conversation with them? As a working professional, I feel like I need to file taxes, but am uncertain about what to do. Do you have any guidance?
This is such an excellent question, so thank you for asking. And what you learn here will not only help you now, but will guide you in your future nanny positions.
While taxes are complicated, it is clear that your nanny family is an employer and you, as a nanny, are a household employee and are indeed a W-2 employee. Many nannies and nanny families don’t enter the profession with this knowledge, but it’s extremely important to follow the rules so you and your nanny family are not breaking any tax laws.
Specifically, the Internal Revenue Service (IRS) defines a household employee as one who has an employer that tells you how the work is to be done, such as when and where you work, and which tasks must be done during your working hours. Household employees should be paid with a W-2. Pictured below, the IRS states the following about household employees:
“You have a household employee if you hired someone to do household work and that worker is your employee. The worker is your employee if you can control not only what work is done, but how it is done. If the worker is your employee, it doesn’t matter whether the work is full time or part time or that you hired the worker through an agency or from a list provided by an agency or association. It also doesn’t matter whether you pay the worker on an hourly, daily, or weekly basis, or by the job.”Publication 926, Department of the Treasury Internal Revenue Service
For more information on the ins and outs of tax laws, please visit Homework Solutions. They have many excellent resources and answers to many questions you might have. Further, CareNectar also has an activity on this topic that would be good to share with your nanny family: Learn Your Responsibilities as a Nanny Employer.
Now, to broach this topic with your nanny family, we suggest saying something like the following: “I have recently learned that the IRS requires that nannies be paid legally with a W-2. Here are some articles I’ve found about the law, and I would love to work with you all to make sure that we’re all following the tax laws.” Print out some articles from Homework Solutions and the activity from CareNectar and share it with them. Another resource is this podcast episode about Nanny Taxes.
As for what to do this year, I would suggest calling our affiliate partner, HomeWork Solutions. Let them know CareNectar sent you, and they will waive your enrollment fee! Call them anytime with your tax-related questions at 571-293-8800. They can help you figure out how to handle your tax-related issues for the past year and set you and your nanny family up for success moving forward!
You deserve to be paid legally! Not only is it important to develop a solid work history, but it’s imperative to follow the law. We hope this helps you in this job and will support you as you move forward in your professional nanny career. And of course, we’re here to help with any other questions you have.
Meet The Expert
Martha has her Masters in Education and is a certified Positive Discipline Parent Educator. She has worked as a sitter, nanny, tutor, or teaching artist over the past 20+ years. In addition, Martha has hosted a child care podcast, Chronicles of Nannya, for several years. She is also the co-founder of Compassionate Childcare LLC and is thrilled to be able to share her experience, knowledge, and resources with CareNectar!