Nanny taxes Washington DC: How to stay compliant
To comply with nanny taxes Washington DC requires that employers withhold and remit the appropriate amounts for Social Security, Medicare, federal unemployment tax, and DC income tax. Maintaining accurate payroll records and filing the required forms ensures families and their nannies are protected and compliant with local laws.
What are nanny taxes?
Nanny taxes are the employment taxes that families must pay when they hire a nanny or household worker. These taxes typically include Social Security, Medicare, federal unemployment tax (FUTA), and state unemployment taxes.
The Internal Revenue Service (IRS) classifies nannies as household employees rather than independent contractors, which means their employers are responsible for withholding and remitting these taxes. These taxes help ensure that nannies earn credit toward Social Security benefits and are eligible for unemployment insurance.
How are nanny taxes paid?
If your household employs a nanny, you must take these steps to pay nanny taxes:
Obtain an Employer Identification Number (EIN) from the IRS website.
Calculate your nanny’s gross salary and any applicable overtime.
Deduct the appropriate amounts for Social Security, Medicare, and any federal and state income taxes due to be withheld.
Deposit withheld taxes with the IRS and state tax agencies, typically every quarter.
At the end of the year, file Form W-2 with the Social Security Administration.
In case you’re daunted by this process or simply too busy to deal with the extra paperwork, Sommet Nannies can help. We've partnered with two best-in-class vendors who provide exemplary payroll and tax support:
Even better, both of these companies offer a generous discount to families who hire a nanny via our agency. They’re an easy and affordable way to stay organized and compliant!
Nanny taxes Washington DC: Employer responsibilities
The following tax, labor, and wage laws apply to household employers hiring a nanny in Washington DC in 2024:
Minimum wage
Nannies must be paid the local minimum wage, $17.50/hour, or the federal minimum wage—whichever is higher. If over 40 hours per week are worked, time and a half must be paid for additional hours.
In Washington DC, the new employer SUI rate is 2.7 percent on the first $9,000 of wages for each employee. This is an employer-only tax and is not deducted from the employee’s salary.
Workers’ Compensation Insurance
If a nanny works 240 hours or more over a three-month period, the employer is required to take out a workers’ compensation policy.
Universal Paid Leave
Washington DC employers must contribute to the Universal Paid Leave program at a rate of 0.26 percent of their eligible employees’ gross or total wages.
FICA taxes (Social Security and Medicare)
Social Security and Medicare payments, commonly referred to as FICA, are payable by both the employer and the employee whenever the annual salary is $2,700 or above. The employer contributes 7.65 percent and withholds the same amount from their employee’s wages.
Federal Unemployment Tax (FUTA)
FUTA is an employer-only tax and is 6 percent of the first $7,000 you pay an employee, for employees that earn over $1,000 in any calendar quarter.
If the idea of navigating the world of taxes doesn’t appeal to you, don't panic! The highly experienced team at Sommet Nannies is here to assist you with all aspects of employing a nanny. We’ll expertly guide you through every point in the process, from drawing up that all-important employment contract to ensuring your legal and financial responsibilities are fully covered.
Welcome to Sommet Nannies, a nanny agency with presence in Boston, Chicago, Washington DC, New York, and nationwide. We help busy families find dedicated and caring college-educated nannies.
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