how to pay nanny taxes in north carolina

Demystifying Nanny taxes in the State of North Carolina

Getting Started

• Get a rough idea of how much tax you should withhold from your nanny's taxes
• Get an FEIN (SS-4) - This number is used by the IRS to identify a business. Note that you are a household employer.
• NC-BR - You need this to withhold taxes at a state level
• Report your new hire
• Register with the Department of Employment Security to be able to pay unemployment insurance/taxes
• Register with Social Security's Business Services Office (BSO) to be able to generate and file W2
• Have Nanny file I-9, W-4 and NC-4

Per Paycheck Tasks

• Withhold Federal Income Tax, Medicare, Social Security, State Income Tax from your nanny's pay.

Quarterly Tasks

• Pay withheld taxes (NC-5)
• Pay unemployment insurance (NCUI 101)

These tasks need to be done on or before:

• April 30th (for the first quarter)
• July 31st (for the second quarter)
• October 31st (for the third quarter)
• January 31st (for the fourth quarter of the previous year)

Yearly Tasks

• Submit and generate W2 before January 31st (for the previous tax year)
• File Schedule H before April 15th with your taxes (for the previous tax year)***
• If you have a dependent day care FSA you can file for a reimbursement before a certain date (Date varies depending on who manages your dependent day care FSA. My deadline is March 31st) (for the previous tax year)

I am not a lawyer or a CPA, but I did sleep at a holiday inn last night. 

Jokes aside, I am not responsible for any of this content. I am just putting it up here in the hope that it might help someone out there. Use this as a guide and not as the word of law. Your situation might be completely different than mine.

*** If you only have household employees you don't need to do the 940/941 forms. You only need to do a Schedule H (Form 1040). (I think)

References:

I used the help of two well written blogs. Some of the authors of these blogs responded to my questions. It would have been much harder for me to do this without their existing documentation and support:

• http://pixeltheoryinc.com/nanny-tax-how-to.html
• http://iamemilyanne.com/2013/06/05/hiring-a-nanny-what-you-may-need-to-know-for-north-carolina/