What Are the Tax and Legal Requirements for a Nanny and Family in New Jersey?
Working as a nanny seems so simple that some people forget to check into the tax and legal requirements. There are several things you should pay attention to if you plan to work as a nanny in the state of New Jersey.
- NJ Nanny Taxes Requirements: You will need to pay the nanny tax.
If you receive more than $1,700 in payment as a nanny, you will have to withhold the following:
This will come out to about 15 percent of your wage. You will also have to take care of the New Jersey unemployment and disability taxes. Sound confusing? It is for most people, which is why you should probably ask your employer to use a payroll agency. They can take care of the paperwork for you and simply send a bill to your employer for the total amount.
- Social Security
- Federal income tax
- NJ income tax
For a professional nanny tax and payroll company visit GTM.
[ Visit GTM Nanny Payroll and Taxes]
At this point, most people just want to call their nannies an "independent contractor" and pay with cash. As tempting as that may seem, it's not a good idea. For starters, it isn't legal – nannies are clearly considered employees in New Jersey. Worse, you may find yourself strapped with lots of extra fees and penalties at the end of the year.
- NJ Nanny Insurance Requirements: Take care of insurance and permissions ahead of time.
New Jersey has very specific expectations for childcare workers when it comes to liability. For instance, if a nanny drives children somewhere without adequate liability insurance, she can be held responsible for accidents and injuries. Likewise, New Jersey will not allow nannies to take children on a trip or even a walk without written permission from the parents. In order to protect everyone involved and to prepare for real problems before they come, it's simply wise to have written permissions in place.
- NJ Child Limit Laws: There are limits on how many children you can watch.
When so many people need childcare, it's tempting to bring families together to save money. But in New Jersey a nanny can only watch 5 children at a given time. The requirements are even stricter for infants (3) or children under two (4). These limits are common-sense and fairly obvious, but make sure you don't accidentally violate them and find yourself more responsible than you expected if there's a problem.
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