Does anyone know exactly what we must do if we are hiring a nanny 3 days a week to help look after our baby (they will come to our place of residence which I understand is a requirement they are not a licenced care center). (??what tax forms must we fill out, ?withholdings calculations, and where to get forms??)
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Domestic help wages greater than 1000 in a calendar year paid to an individual who provides domestic type services in one's home should be reported to the recepient on form W2.

You as the employer are required to pay any payroll taxes on such labor once per year on your individual tax return by completing schedule H along with your 1040.

These wages may also require reporting to your state's Unemployment Bureau and quarterly or annual returns may be required there also. Just depends on the states in which you live and their laws.

If the services are performed outside of your home the reporting requirements would then fall on the person who provides the services.

Pete