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If I hired a 17-year-old nanny for the summer, I know I don't have to withhold Social Security or Medicare taxes due to her age, but do I still need to file a W-2 form with the Social Security Administration, showing her earnings, but no withholdings? If so, how do I make it clear she was exempt from the withholding of those taxes? (Typically, for a nanny, I file a schedule H form also; not a 1099.)

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Age is not a relevant factor for the question of filing a W2. See the IRS publication 926:

Form W-2.

File a separate 2014 Form W-2, for each household employee to whom you pay either of the following wages during the year.

  • Social security and Medicare wages of $1,900 or more.

  • Wages from which you withhold federal income tax.

If she's exempt from FICA and you didn't withhold income tax, they you don't need to file W2. However, I suggest you consult with a licensed tax professional (EA/CPA licensed in your state) to be certain.

Pay attention: the fact that she's 17 doesn't necessarily make her exempt:

Wages not counted.

Do not count wages you pay to any of the following individuals as social security or Medicare wages, even if these wages are $1,900 or more during the year.

...

An employee who is under the age of 18 at any time during the year. Exception: Count these wages if providing household services is the employee's principal occupation. If the employee is a student, providing household services is not considered to be his or her principal occupation.

  • They have payroll services specifically for baby sitters and nannies. It is costly, but it would save you time and not have to learn about employer responsibilities. – Sun Sep 9 '14 at 14:58

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