What to do if my parents want to hire a part-time nanny as a gift to us?

They are non-resident non-citizens and do not live in the US (i.e. Canadian). Do they have to pay the nanny tax? Can the nanny’s wages be considered a “gift”?

Asked on January 9, 2013 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The issue is not where your parents live (or the location of any source of funds for a payroll or employee)--it's that the proper taxes (e.g. FICA withholding) must be taken out of the pay of anyone employed in the U.S., and their earnings must be reported at the end of the year on the proper form. Whether or not the money your parents pay to you is considered a gift does not change that it, as wages, must have the proper withholding and reporting. As for how best to structure matters for your and your parents own tax benefit, you should speak with a tax professional (e.g. an accountant), who can taken into account your overall income, deductions, etc.


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