Welcome To NannyPay News
Volume 4, Issue 1 (March 2007)
It is intended to provide household employers and NannyPay users with information about employment issues, tax tips, NannyPay software tips, and other items of interest in a brief, easy-to-read format.
If you have any comments or suggestions about our newsletter, please let us know by emailing us at: newsletter@essentia-soft.com. We look forward to your feedback.
Tax Withholding For Your Nanny’s Future
Could you ever repay your Nanny for the critical role she plays in your home? After all, she helps to maintain a healthy and loving sense of well-being within your household and brings an impressive combination of experience in engaging little ones and balancing your needs as well. Unfortunately, as much as Nannies give, they may choose to neglect their own financial needs. In an effort to show heart to their employers and sometimes to make ends meet, a Nanny may accept or request a compensation arrangement in which taxes are not withheld. She may consider herself a self-employed contractor and honestly assume she is exempt from tax obligations. Despite how you describe your employment relationship (independent contractor or employee), however, if your nanny works in your home, the IRS clearly considers your Nanny to be your household employee (see IRS Publication 926). As your employee, you are obligated to withhold and pay Social Security, Medicare, and federal unemployment taxes.
While on the surface it may appear that paying a Nanny “off-the-books” or “under-the-table” benefits her financially, such an arrangement may come back to haunt her should she apply to rent an apartment, try to make a major purchase like buying a car, or ever need to apply for unemployment or Social Security benefits. Unfortunately, many Nannies and their employers don’vvvt know how much this payroll decision impacts Nannies in the long run. Therefore, it is important to initiate a meaningful discussion with your Nanny about withholding taxes. Show your Nanny that you are concerned about her financial security. Below are a few talking points to help you illustrate the benefits of withholding payroll taxes when you approach your Nanny:Nanny Benefits:
Nanny Benefits:
Withholding payroll taxes for your nanny:
- permits your Nanny to collect unemployment benefits should the need arise, and to qualify for Social Security and Medicare benefits;
- provides your nanny with a verifiable income history to qualify and obtain auto loans, credit cards, and other financial services based upon a sound salary history;
- ensures your nanny remains a legal employee, and protects her legal residency status; and
- acknowledges and treats your nanny as the important and professional employee that she is.
Employer Benefits:
Withholding and paying payroll taxes on your nanny’vvvs wages:
- permits you to obtain dependent care tax credits, and to participate in your employer-sponsored dependent care benefit plans;
- limits your liability in the event of an IRS audit of your taxes;
- protects you from unsubstantiated claims being made by former employees who know you were paying them illegally “under the table”; and
- keeps you legal in all respects and provides you the peace of mind knowing that you won't be caught breaking the law (this is particularly important for government employees and members of the Armed Forces);
Remember, you can withhold payroll taxes easily and inexpensively when you use NannyPay® software.
Tip — Show Your Nanny That You Appreciate Her
Showing your Nanny that you appreciate her is not only a kind gesture, but it helps her build a rapport and sense of satisfaction with you and your children. When considering a gift to give your nanny for a special occasion, such as her birthday, consider a gift membership in the National Association for Nanny Care (www.nannycredential.org), the International Nanny Association (www.nanny.org), or in some other local nanny support group. These organizations provide support and information specific to the nanny professional.
NannyPay Tip — Transferring Your NannyPay Application And Payroll Data To A New Computer
We receive a lot of inquiries about how to transfer NannyPay and its data files to a new computer. The procedure is relatively easy.
Like most Windows software, NannyPay requires certain associated application and system files to be installed and registered with your operating system. The NannyPay installation program does that automatically. Therefore, if you are changing systems you will need to do a full reinstallation of NannyPay on your new computer. If you don't have the full installation package, you can download it from our web site at www.nannypay.com. Do not download the update file. The updater is designed for users who already have NannyPay installed on their systems.
To move your payroll data to your new computer, you will need to move your data files. If you're using NannyPay standard software, each employee is associated with two data files, one with an ".ndf" extension and the other with an ".npf" extension. If you're using NannyPay Staff Edition, there is only one data file, which has an ".rdx" extension. The exact name and location of your file will depend upon how you set it up when you first installed NannyPay. If you don't remember the name or location of your data files, try doing a search on your old computer for files with the above-mentioned extensions. Once you have located your data files, copy them to a CD-ROM or other media and then copy them to your new computer in an easy to remember location. We often suggest creating a "My Payroll" folder in your "My Documents" directory. Locating your data files there will permit you to include them with your normal data backup, which I'm sure you regularly do...right?
After you have installed NannyPay on your new system and run it for the first time, NannyPay will think you are a new user. Simply choose the "open existing file" option when NannyPay launches the setup wizard, locate and open the data files copied according to the above directions, and you should be good to go.
When you have completed the installation on your new system, you may need a new registration key. If so, please send us a request for a key and we will promptly reply.
If you need any further information or have additional questions, please don't hesitate to contact us at techsupport@nannypay.com.