Step 2: Registering with the IRS and State Revenue Department

Once you have verified that your household employee can legally work for you, your next step is to register with the Internal Revenue Service (IRS) as a Household Employer. You do this by completing Form SS-4 and sending it to the IRS. The IRS will then assign you an Employer Identification Number, or EIN. An EIN is the number used to identify you as an employer, and will be placed on all your tax filings as an employer much like your Social Security number is used to identify you as an employee, and placed on your annual individual income tax return.

At the same time you apply for an EIN, you should also contact your state revenue department and register with it as an employer. The telephone numbers and addresses for all fifty state withholding departments are conveniently listed in the State Withholding Tax Agencies section. Most state revenue departments share information with the IRS, and will usually contact you if you don't call them, so go ahead and get it over with!

Since 1998, the federal Personal Responsibility and Work Opportunity Act of 1996 (federal welfare reform law) requires all employers to report information on newly-hired employees to the agency designated by their state. You should obtain information on how and where to report information on your household employee at the time you first register with your state as a household employer. In many instances you can r eport "new hires" online at your state's new hire website.

Form SS-4 is the Application for Employer Identification Number, or EIN. You need an EIN to report and remit employment taxes for your household employee and to give tax statements to your household employee. You must use your EIN on all items you send to the Internal Revenue Service (IRS) or the Social Security Administration (SSA).

Fill out and mail Form SS-4 to the IRS to obtain an EIN. If you do not have your own EIN by the time a return is due, write "Applied for" and the date you submitted Form SS-4 in the space shown for the number.

EIN stands for "Employer Identification Number". The IRS uses an EIN to keep track of the taxes you owe and pay as an employer, much like it uses your Social Security number to keep track of your individual (personal) taxes. If you do not have an EIN, get IRS Form SS-4, Application for Employer Identification Number.

You may enter "Applied For" in the NannyPay software Set Up Screen if you don't have an EIN number by the time you start using NannyPay. See Setting Up NannyPay Software for more information.