2018 Nanny Survey Results: Taxes & Withholdings

Note: Parents who hire a nanny to work in their homes are considered to be a household employer by the State.  A nanny is not a self-employed contractor (like a plumber or housekeeper is) because the parent/employer is setting the work hours and assigning tasks.  Household employers are required to register with the State of California and withhold SDI, worker's comp, etc. As an employer you are also required to report the nanny's earnings to the IRS.  The State publishes a Household Employer's Guide that explains these requirements. Many parents use a payroll service to handle this.
 
As in previous surveys, most respondents said they do not withhold/pay taxes and insurance, or report their nanny's earnings to the State or IRS. The most common reason for not reporting the nanny's income is because the nanny didn't want them to -- many parents commented that nanny is not legal to work in the US, is afraid of deportation, or doesn't want to be in a state/federal database. 
 
1. Do you pay or withhold any federal or state taxes or insurance for your nanny?
  • Yes 26% (64)
  • No  74% (184)
2. Do you plan to take the childcare deduction on your own income tax and/or use your employer's pre-tax withholding for childcare? 
  • Yes 39% (88)
  • No 61% (139)
3. Have you registered as a household employer with the State Employment Development Department (EDD)?
  • Yes 28% (64)
  • No  72% (163)
4. Do you report the wages you pay your nanny to the IRS and the State?
  • Yes 35% (79)
  • No 65% (148)
5. If you do not report your nanny's wages, what is the main reason why?
Nanny asked me not to report her wages.
42.21%
65
It's up to the nanny to report her wages.
19.48%
30
I didn't know it was a requirement or I don't know how to.
16.88%
26
Another reason not listed above (please use the Comments section at the end to tell us.)
13.64%
21
Nanny asked me to report only partial wages so she isn't disqualified from income-based programs.
5.19%
8
Nanny works for another family that reports her wages.
2.60%
4
Nanny works for an agency that takes care of that.
0.00%
0
TOTAL 154