--- title: HR Informant | Taxes description: Taxes | Want to know what is the hottest and latest employment law and HR trends and topics? 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[HR Login](http://www.thinkhr.com/hrhotline/login.php) - [Payroll Login](https://iop.intuit.com/login/aclogin.jsf) - 1-888-353-2976 ![HR Allen Consulting Services](https://promotion-payroll-hr.pinnaclehro.com/hs-fs/file-2109694015-jpg/images/mike.blog.final.jpg?width=990&height=198&name=mike.blog.final.jpg) ## [Pay Your Nanny on the Company’s Dime and Risk Jail Time](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/bid/77753/Pay-Your-Nanny-on-the-Company-s-Dime-and-Risk-Jail-Time?hsLang=en-us) [Posted on Fri, Aug 10, 2012](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/author/michael-allen) - [Tweet](https://twitter.com/share) [![](http://blog-s1.intuitstatic.com/wp-content/blogs.dir/1/uploads/iStock_000012432210XSmall-300x180.jpg) ](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/bid/77753/Pay-Your-Nanny-on-the-Company-s-Dime-and-Risk-Jail-Time?hsLang=en-us) You couldn’t run your small business without your nanny. Heck, without her looking after the kids, you wouldn’t even be able to go to work. So, it makes sense to put her on the company’s payroll, right? *Wrong.* Your nanny is employed by your *household*, not your *business*. U.S. law and the IRS are very clear on this point — and you run a big risk if you choose to bend the rules to make your life “easier.” In fact, if the government should ever find out, you’re likely to face and audit and potentially devastating penalties. Here’s how to do the right thing: - Embrace being a household employer and apply for an [Employer Identification Number](http://www.irs.gov/businesses/small/article/0,,id=98350,00.html) from the IRS. - Ask your nanny to complete the necessary employment forms. These include an I-9 and a W-4. See [IRS Publication 926 (2012): Household Employer’s Tax Guide](http://www.irs.gov/publications/p926/index.html) for complete details. - Withhold (and remit to the IRS) your share of the employee’s ****[Social Security and Medicare](http://www.irs.gov/publications/p926/ar02.html#en_US_2012_publink100086735) taxes. Together these taxes should amount to 7.65 percent of the employee’s wages, and they are the only withholdings legally required of a household employer.**** - Withhold and remit any applicable state and federal income taxes. Although this isn’t legally required, it will help your employee avoid large lump-sum bills at tax time. Once the initial payroll and withholding process is set in place for your nanny, you’ll find that paying her separately is relatively simple. Besides, when you consider the potential alternative — audits, fines, even jail time — it’s well worth any extra effort. [Read More](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/bid/77753/Pay-Your-Nanny-on-the-Company-s-Dime-and-Risk-Jail-Time?hsLang=en-us) 0 Comments [Click here to read/write comments](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/bid/77753/Pay-Your-Nanny-on-the-Company-s-Dime-and-Risk-Jail-Time?hsLang=en-us#comments-listing) Tags: [Taxes](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/topic/taxes), [HR Allen Consulting Services](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/topic/hr-allen-consulting-services), [HR Informant](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/topic/hr-informant) ## [Higher Federal Taxes for California Employers?](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/bid/69439/Higher-Federal-Taxes-for-California-Employers?hsLang=en-us) [Posted on Fri, Dec 16, 2011](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/author/michael-allen) - [Tweet](https://twitter.com/share) California employers may be paying higher taxes starting January 1, 2012. The tax increase would amount to $21 per year for any employee who makes $7,000 or more in 2012. California employers pay UI taxes on the first $7,000 of wages per employee. California has not repaid money it borrowed from the federal government to pay unemployment insurance (UI) benefits. Due to California’s outstanding loan balances, the U.S. Department of Labor notified the Internal Revenue Service and the California Employment Development Department (EDD) that the state is a “credit reduction state.” Employers subject to unemployment tax laws of a credit reduction state must pay additional federal unemployment tax when filing a Form 940, according to the IRS website. See CalChamber’s [coverage of the potential increase to UI taxes](http://www.calchamber.com/Headlines/Pages/12052011-StateUIFundDebtLeadstoHigherFederalTaxonEmployers.aspx?CID=941) for the complete story. **More Information **The EDD is advising employers with questions on the FUTA credit reduction, Form 940 or Publication 15 (2011) (Circular E) Employer’s Tax Guide to contact the [IRS](http://www.irs.gov/). [Read More](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/bid/69439/Higher-Federal-Taxes-for-California-Employers?hsLang=en-us) 0 Comments [Click here to read/write comments](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/bid/69439/Higher-Federal-Taxes-for-California-Employers?hsLang=en-us#comments-listing) Tags: [Taxes](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/topic/taxes), [Federal Taxes](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/topic/federal-taxes), [business taxes](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/topic/business-taxes), [California business tax](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/topic/california-business-tax), [California](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/topic/california) [All Posts](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/all) ### Stay updated with the hottest and latest employment law and HR trends and topics ### Most Popular Blog Posts Areas We Serve - 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