I'm trying to figure out how much I need to withhold from my sitter's pay. She is single (divorced, I believe) with a child (under 18, US citizen) who lives with her all year. She pays all of her and her daughter's living expenses. She lives with two of her sisters and they share household expenses. The three sisters each file their own taxes (i.e. they do not claim each other as dependents). She is claiming she is not head of household, so I should be withholding more taxes. I think her household is she and her daughter so therefore she can file as head of household.

To clarify, she is a nanny and full time employee. I am also paying unemployment taxes for federal and state. (And state withholding, and Social Security and Medicare, and filing Schedule H.)

One piece of information which may be relavant that I didn't include is that of the three sister who live together, two of the three have minor children who they can declare as dependents. All three file their own taxes. Can two of the three at the same address claim head of household since they each pay 100% of their and their child's expenses or can only one of the three at that address claim head of household.

A babysitter?


Honestly, I always thought babysitting was kind of an under-the-table kind of thing, but maybe I am confused?

Is the babysitter coming to your house to "babysit" like a nanny? If so, then yes you can withhold taxes. I would suggest contacting your accountant. B/c you will need to file a Schedule H on your personal return. And withholding taxes means having to remit the taxes to the IRS, State, & Unemployement all of which have deadlines.

As for withholding taxes for her, I would have her fill out a W-4 and withhold based on her checked filing status and the # of exemptions.

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Originally Posted by sainey

I'm trying to figure out how much I need to withhold from my sitter's pay. She is single (divorced, I believe) with a child (under 18, US citizen) who lives with her all year. She pays all of her and her daughter's living expenses. She lives with two of her sisters and they share household expenses. The three sisters each file their own taxes (i.e., they do not claim each other as dependents). She is claiming she is not head of household, so I should be withholding more taxes. I think her household is she and her daughter so therefore she can file as head of household.

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Is the baby sitter your regular employee? If yes, then she will complete Form W4 about what you should withhold. Employer also pays their share of FICA taxes.

If she is independent contractor, then you don't withhold any taxes.

To know about the difference, read: Your U.S. Tax Return: W2 or 1099: Employee or Independent Contractor.