Why Paying a Nanny is So Confusing: Get the Payroll Support You Need

Paying a nanny is itself a nuisance for many households that fall under the IRS’s household employee filing requirements but which otherwise have little accounting or employer-based filing experience. Those parents who want the most reliable and consistent childcare and household services often seek out these highly reputable and experienced professionals.

Let Advanced Micro Solutions (AMS) make sure your decision isn’t unduly swayed by the need to manage filing forms and employee payroll taxes. Which is to say we can’t change federal or state-mandated employer taxes, but we can take the headaches out of complying with the form filing itself. Use the following resources to figure out whether you need to bother with paying nanny employment taxes. Then, you can buy the payroll and filing software you need from AMS.

Professional Nannies vs. Self-Employed Household Services

Is paying a nanny service by any other name so different? Here’s another way to ask this question: What exactly does a nanny do, and how is it different than any other household service? A nanny is a highly experienced professional whose primary duties are childcare but who commonly complete other household chores, including cooking and cleaning. On the one hand, this professional can look like a collection of babysitting, house cleaning, and food prep services that are widely available as commercial businesses and self-employed contractors.

For the purposes of payroll tax classification, paying a nanny is also about who controls the nature and production of the work, as well as the supplies. Thus, if you hire a house cleaning service and the crew shows up with their own supplies and offer a prepackaged house cleaning service, these professionals are not a household employees, much less a nanny.

In other cases, the distinction is not so clear-cut. If you use the same babysitter over and over and start expecting them to work around your schedule for availability, this type of business relationship may require employment payroll taxes. If it feels like your nanny pay falls into this gray area, you can review Publication 926 from the IRS website. You can ask the IRS to make an official determination using Form SS-8.

Don’t Let the Hassle Keep from Hiring and Paying a Nanny

Every solution starts with our W-2/1099 Forms Filer. This software provides an intuitive, menu-driven platform and a module interaction that allows you to choose whatever level of software support makes sense for your household. Want to keep your own bookkeeping and payroll accounting? Likely, all you’ll need is our Forms Filer Plus with support for 1040 Sch H and applicable state-level filing forms. Want a nanny payroll software solution that can take care of all your payroll processing and paycheck/direct deposit needs? Check out AMS Payroll. Here’s our entire catalogue of form filing software products and modular pricing:

  • W-2/1099 Forms Filer (required platform)
  • Forms Filer Plus
  • AMS Payroll
  • Software-Generated Forms
  • E-File Direct
  • Affordable Care Act Filer
  • 1042-S Filer

Want to learn more? Ready to get started? Download our demo software, talk to our Sales and Information team at (800) 536-1099, or buy our products online at any time.

Software Solutions from AMS

Our W-2 and 1099 Forms Filer is our only required platform. From there, users pick the services they need. Choose from the tools below to build out your customized accounting software.