How to Pay Your Nanny Legally in CT

If you’re hiring a nanny in Connecticut, it’s important to pay them legally by following the state’s payroll and tax laws. Failing to do so can result in legal and financial repercussions down the line. In this blog post, we’ll discuss steps you can take to ensure you know how to pay you nanny legally in CT.

Nanny Tax Requirements in CT

Here are some steps you can take to ensure you know how to pay your nanny legally in CT:

1. Fist, ensure you understand nanny industry standards such as guaranteed hours, PTO, and expectations for both you and your nanny.
2. Determine if you’re considered a household employer: if you pay your nanny more than $2,600 a year or $1,000 in a quarter, you are a household employer.
3. Complete an I-9 form: Print out an I-9 form for your nanny to fill out. This must be done after accepting the job offer and no later than their first day of work.
4. Obtain Tax Registration Numbers:  You’ll need to obtain a Federal Employer Identification Number and Connecticut Tax Registration Number.
5. Register as an Employer: You’ll need to register as an employer with the CT Department of Labor, the CT Department of Revenue Services, and the CT Paid Leave Authority. You’ll also have to register your employee within 20 days of hiring.
6. Plan to pay your nanny legally: Connecticut law requires that all household workers such as nannies be paid either daily, weekly, or bi-weekly. Overtime at the rate of 1.5x regular pay is due for any hours beyond 40 worked in one calendar week.
7. Withhold and pay taxes: As a household employer, you’ll need to withhold and pay Social Security and Medicare taxes. You’ll also need to pay federal and state unemployment taxes.
8. File tax forms: You’ll need to file Forms W-2 and W-3 with the Social Security Administration and Form CT-W3 with the Connecticut Department of Revenue Services. You must also file a Schedule H with your family’s individual tax return(s).
9. Keep accurate records: It’s important to keep accurate records of your nanny’s wages, taxes withheld, and tax payments made.
10. Consider utilizing a payroll company: A payroll service can help you calculate and withhold taxes, file tax forms, and keep accurate records.

To learn more about your federal obligations as a household employer, read the IRS’s Publication 926 – Household Employer’s Tax Guide. Paying your nanny legally may seem daunting, but it’s important to follow the law and protect yourself and your nanny. By following these steps, you can ensure that you know how to pay your nanny legally in CT and avoid any legal issues down the road.