Simplified
Tax Forms for Your Au Pair? Au Contraire
By JIM TOSONE
Published in the Sunday New York Times on January 18, 1998
Are you a
To begin, forget all that stuff you’ve read about how
payment of the nanny tax has been simplified. That’s the Federal nanny tax. The
Form UC-1 (Status Report of
Employing Unit)
Before
you are granted the privilege of paying the nanny tax, you must file Form UC-1
to request an employer registration number. Unfortunately for you, UC-1 was
never designed for parents who hire nannies. Be prepared to complete 14
sections of complex questions to tell the state, “Hey, I’ve hired a nanny.” But
with a little forethought, some educated guessing, and several calls to your
accountant, you can probably fill out Form UC-1 in less time than it takes to
quit your job and care for the child yourself. After filing UC-1, you’ll
receive a letter from the Supervisor of Status Determinations which basically
says, “You’re right, you did hire a nanny.” Only the Supervisor takes six
paragraphs to say it, beginning with “BASED ON AVAILABLE INFORMATION, WE HAVE
DETERMINED YOU ARE AN EMPLOYER SUBJECT TO THE NJ UNEMPLOYMENT COMPENSATION LAW
UNDER SECTION 19H13.” (Maybe after the government solves the year 2000 problem,
they can solve its OUR CORRESPONDENCE IS IN ALL CAPITAL LETTERS problem.)
Form WR-30 (Employer Report
of Wages Paid)
You
must list on Form WR-30 the nanny’s name, Social Security number and wages
paid. Form WR-30 must be returned by the 13th day after the end of
each calendar quarter. But the really tricky part is figuring out the column
called Base Weeks During Which Employee Earned $133 or More. No one knows why $133.
But Base Weeks seems to have something to do with the fact that some weeks
don’t fall neatly into a single quarter, the creator of the Gregorian calendar
not being prescient enough to anticipate the nanny tax.
Form UC-27 (Quarterly
Contributions Report)
So you
know how much you owe. Now you must complete Form UC-27. There’s some amazingly
unfathomable stuff on this form, even for the government. Take Item 1A, which
requests the “Number of covered workers employed during the pay period which
includes the 12th day of each month.” The form comes in the same
packet as Form WR-30 and there’s only one return envelope. Another
head-scratcher is Item 1B, which requests the “number of women employed during
the pay period which includes the 12th day of the 3rd
month only.” The idea is probably to ensure that adequate numbers of women are
being employed, obviously one of the burning issues in the area of nanny
employment. Form UC-27 even has a space to “enter the taxable wages of covered
workers who have filed a waiver of benefits rights … because of adherence to
the faith of any church, sect, or denomination that, in the practice of
religion, depends for healing upon prayer or spiritual means.” Translation: if
you want to save a few bucks on the nanny tax, hire the next Jehovah’s Witness that
shows up on your doorstep.
Catastrophic Illness in
Children Relief Fund (CIF)
Once
a year, you’ll receive an assessment of $1 per employee to “aid families who
have incurred extraordinary medical expenses due to a child’s illness.” Since
you only have one employee, your CIF assessment for the year will be $1.00.
This will not cover the state’s postage and handling costs, let alone leave
anything for seriously ill children.
See how easy that was? It’s hard to believe you were thinking that compliance would be more trouble than it’s worth. If you have any further questions, I’m sure you’ll find the answer in the 151 pages of regulations provided for you in the New Jersey Employer Handbook. Oh, and when you’re not busy complying with the nanny tax, try to spend a few minutes with your kids.