Q. The W-2 deadline has passed by and you haven’t gotten yours? What to do?
IRS requires employers to post mark W-2 Forms no later than January 31st.
The IRS encourages you to allow at least until February 15th for the form to be delivered. They recommend you contact your employer at the earliest possible date to confirm that they have your current address if you have moved in the last year.
Q. It is February 16th and the form is still missing?
Nannies and other household employees call HWS every year in a panic when they don’t get their W-2 form. Before submitting any paperwork to the IRS, we suggest the following actions be taken:
- Contact your employer! Call or send an email, the employer may have a reason for the delay, a question, or may have just completed it.
- If the reason is a change of address, or any distribution issue, please provide the new address and allow a couple of weeks to receive the replacement form. Electronic copies would work as well.
- If you find the employer has no intention to provide you a W-2, remind him you are a household employee and you are entitled to this form. Use the same reasons if the employer intents to give you a form 1099 for Independent Contractors. Household Employees are not independent contractors. Accepting a 1099 makes YOU responsible for your employer’s taxes!
- It is a common scenario that family and nanny have gone separate ways and making the contact seems impossible. The nanny is still responsible to report her earnings to the IRS. Anytime the W-2 form is not received, the nanny needs to file Form 4852, which substitutes the W-2.
Q. What is Form 4852?
Per IRS, Form 4852 serves as a substitute for Forms W-2, W-2c, and 1099-R and is completed by taxpayers or their representatives when:
- Their employer or payer does not give them a Form W-2 or Form 1099-R, or
- An employer or payer has issued an incorrect Form W-2 or Form 1099-R, and has not issued a Form W-2c or corrected Form 1099-R after you have requested it.
Attach this form to the back of your income tax return, before any supporting forms or schedules.
Questions? There is a more in depth discussion at the 4nannytaxes.com website OR call for a free consultation at 800.626.4829. Our Friendly and Helpful tax specialists will be happy to assist you!
Q. ¿La fecha límite para recibir tu W-2 ha pasado y aún no la has recibido? ¿Qué hacer?
El IRS requiere que los empleadores entreguen el Formulario W-2 a sus empleados a más tardar el 31 de enero. Recomienda a los empleados, así mismo, que si éste no ha sido recibido dentro de la fecha límite, se de un plazo adicional hasta el 15 de febrero para presentar su reclamo ante el IRS. Primero debe contactar a su empleador para confirmar que tiene la dirección actual, en caso se haya mudado en el último año.
Q. ¿Es 16 de febrero y aún no la recibes?
Cada año HomeWork Solutions recibe llamadas de niñeras y otros empleados domésticos en pánico cuando no han recibido su formulario W-2 pasada la fecha límite. Antes de presentar cualquier reclamo ante el IRS, le sugerimos se adopten las siguientes medidas:
- ¡Habla con tu empleador! Llama o envíale un correo electrónico. El empleador puede tener una razón para la demora, una pregunta, o tal vez ya haya completado y enviado éste documento.
- Si el motivo es un cambio de dirección o cualquier otro problema de distribución, indique la nueva dirección y permita un par de semanas para recibir el formulario de reemplazo. Copias electrónicas también funcionan.
- Si encuentra que el empleador no tiene intención de proporcionarle el formulario W-2, recuérdale que tú eres un empleado del hogar y que tienes derecho a este formulario. Utiliza las mismas razones, si él le intenta dar una forma 1099, para Contratistas Independientes. Los empleados del hogar no son contratistas independientes. El aceptar una Forma 1099 te hace responsable de tus impuestos así como los de tu empleador!
- Es común que la familia y la niñera tomen caminos diferentes, haciendo que el contacto sea imposible. La niñera es, en éste caso, responsable de reportar sus propios ingresos al IRS. Cuando sea imposible recibir el formulario W-2, la niñera tiene que presentar el Formulario 4852, que sustituye a la W-2.
Q. ¿Qué es elFormulario 4852?
Según el IRS, el formulario 4852 sirve como sustituto de las Formas W-2, W-2c, y 1099-R y se completa con los contribuyentes o sus representantes cuando:
- Su empleador o pagador no les da un Formulario W-2 o el Formulario 1099-R, o
- El empleador o pagador le ha emitido un Formulario W-2 incorrecto o Formulario 1099-R, y no ha emitido un Formulario de corrección W-2c o 1099-R después de haberlo solicitado.
Adjunte esta forma a la parte posterior de su declaración de impuesto sobre la renta, antes de adjuntar cualquier otra forma de apoyo o los horarios.
¿Más preguntas? Hay una discusión más profunda en nuestra página de internet www.4nannytaxes.com o llámanos al 800.626.4829, ofrecemos consultas gratis, nuestros representantes de servicio al cliente estarán felices de ayudarte!
Reprinted from February 2008
Nannies are employees of the families they work for. They are not independent contractors, whether the family or nanny wants to be or not.
Families sometimes try to completely side step their employment tax obligations by giving the nanny a 1099 form at year end. In so doing, they avoid paying their share of Social Security and Medicare taxes, as well as unemployment taxes, and they push their tax obligations on to the nanny. This path allows the family the benefit of child care tax credits without the corresponding expense of paying their portion of the employment taxes.
Nannies are fighting back. A few years ago a nanny received a 1099 from her employer, a well known figure in the entertainment industry. She had negotiated a payment NET of taxes with the employer, and received her net pay as promised. At the end of the year (and after she had left their employment) she received a Form 1099. When she took the 1099 form to her tax preparer, she almost cried when she found out how much tax she owed. She followed the preparer's advice and did two things - paid the tax AND filed a SS-8 form, Determination of Employee Work Status for Purposes of Federal Employment Taxes. She stated she had been employed as a nanny, and that according to IRS regulations, her employers had improperly identified her as an independent contractor to avoid employment taxes.
Three years later, she received a refund of ALL of her Social Security and Medicare Taxes (15.3% of her gross wage or 'self employment tax') back as the IRS agreed with her that she was misclassified. Happy day for the nanny. The IRS then presented the employer with a bill for all Social Security & Medicare taxes - both employee and employer portions - along with calculated penalties and interest.
The moral of the story - nannies can and will fight back. It is best to set up your nanny taxes correctly up front and avoid the hassle completely. Your nanny is entitled to a Form W-2 at year end, and you are responsible for the remittance of all Social Security and Medicare taxes. The IRS is unambiguous on this - see IRS Publication 926. It does not matter if the nanny lives in or lives out, is full time or part time, or how she is paid. If you paid her $1800 or more in 2012, she is due a W-2 form.
Employee Misclassification is a major enforcement priority at the Federal level (US Department of Labor) and at the state level. Tax revenue from unemployment taxes - an employer obligation for all employees - is strained to meet unemployment claims. Thirteen states, the US Department of Labor, and the Internal Revenue Service entered into formal information sharing agreements in 2011, all intended to speed up collections and enforcement when employers try to classify an employee as an independent contractor and skip their employment tax obligations. A W-2 form is due to any household employee who received $1800 or more in wages in 2012.
The SSA has recently resumed sending DECOR notices, commonly referred to as "No Match Letters" to employers when the name and Social Security Number on a form W-2 do not agree with the SSA's records.
Many employers review the employee's SSA Card at the time of hire for Form I-9 compliance (although other documentation is acceptable and must be accepted if presented). If you have the opportunity, carefully review the employee's Social Security Card at time of hire to ensure you record the employee's name for tax purposes to agree with the SSA. Common problems include:
- Marriage or divorce, with SSA records not updated by the employee.
- Ethnic surnames recorded differently with SSA than commonly used by the employee.
- Identity theft - a valid SSN is being used by an individual other than the actual account holder.
- Employee address missing on form W-2 or is not a valid USPS address.
Employers who receive these letters are required to take reasonable and timely steps to address the issue. SSA advises that employees may need 90 days or more to make records changes. Employers are advised to make copies of any correspondence (even e-mails) they use to communicate with separated employees for a period no less than 4 years.
Click to view Sample DECOR letters.
In order to increase the number of SSN's available, beginning this month the SSA will be changing the way new SSNs are assigned. SSNs have always been assigned geographically. We can often tell where someone's SSN was issued based on the first three digits of the SSN. The new method will issue the numbers randomly and also allow new digits in the 'area' fields (the first 3 digits).
The SSA is also hoping these changes will help reduce identity theft. The SSA will continue to offer SSN Verification Services to assist employers in determining name and number matches for employment tax reporting, and will continue working with the Department of Homeland Security's e-Verify program to help employers determine employment eligibility.
Nanny tax concerns run in a cycle and after 18 years helping families with nanny tax compliance we see reoccuring patterns. HomeWork Solutions' staff report receiving several calls a day last week from nannies seeking guidance when their nanny employer has not provided them with their W-2 form.
By definition nannies are household employees. This means that their employers, the family, have employer tax reporting responsibilities including the issuance of a Form W-2 to all household employees who earned $1700 or more in the calendar year. This is commonly referred to as the "nanny tax." (IRS Publication 926 Household Employers Handbook)
The family is responsible for:
- Paying the employer portion of the Social Security and Medicare taxes (FICA) to the IRS.
- Withholding and paying the employee portion of the Social Security and Medicare taxes to the IRS. If the family failed to withhold (collect) this tax from the employee, they are still responsible for paying this to the IRS. (IRS Publication 926 P. 4)
- Wage reporting and paying state unemployment taxes (SUTA).
- Paying the Federal Unemployment tax (FUTA).
- Workers Compensation Insurance, governed by state regulations.
- Issuing a W-2 form to any household employee who earned $1700 or more in the calendar year.
- Completing Forms W-3 and W-2 and submitting to the Social Security Administration.
The nanny is personally responsible for her Federal and State income taxes. The family may have agreed to withhold income taxes from the nanny's paycheck. In that case the amounts are indicated on the W-2 form. Withholding income taxes is not a legal requirement for families. If they were not deducted, it is the nanny's responsibility to pay these amounts.
All U.S. residents are legally obligated to report their income and pay any income taxes on an annual basis. A missing W-2 form does not relieve the nanny of her responsibility to report her income. Failure to do so is felony tax evasion!
Nannies, if you were not issued a W-2 and want to know the steps to take, we have detailed instructions and sample forms available to assist you at the 4nannytaxes.com website.