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A friend has recently started a job as a nanny in Ohio and received their first paycheck. The employer family also provided a spreadsheet that records the gross pay, various withholdings, and net pay. The employer family records withholdings for Employer taxes as well as some Employee taxes.

For Employer taxes, they withhold for Federal Unemployment, Social Security, Medicare, and Ohio Unemployment.

For Employee taxes, they withhold for Social Security and Medicare only.

As a new Ohio "household employee," how would my friend handle Federal and State taxes? How do you know how much to withhold? How do you handle paying these taxes to the IRS? Is it a lump sum payment at the time of filing taxes, or can you make payments on each check?

Is the employer required to withhold for Employee Federal and State taxes or is it optional? Should my friend be expecting a W2 form from the employer family at the end of the year?

I know that this post contains several questions. It has been very hard finding answers to these questions on Google as many search entries only provide answers to the household employer. I hope that someone can help my friend get started in the right direction. Thanks in advance!

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    To be clear, Federal unemployment tax never applies to employee (only employer) and most state unemployment taxes the same. And technically these plus employer-half FICA are payments not withholding; when the W-2 comes make sure they are NOT counted in gross pay. OTOH, as answered, income tax is all on the employee, both Federal and state (for states that have income tax).
    – dave_thompson_085
    Commented Aug 9, 2017 at 12:21
  • @dave_thompson_085 thanks for the heads up. I will take a look at the spreadsheet that the family uses and make sure they aren't actually taking the employer taxes from my friend's check.
    – terbubbs
    Commented Aug 9, 2017 at 13:04

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I just started as a household employer in California. I'll try to answer your questions.

Yes, your friend should expect a W2 in the new year. I believe they have to be mailed by January 31.

Withholding of federal and state income taxes is optional. A household employer has to agree to withhold.

You or your friend should go ahead and read the IRS and Ohio tax agency documents for household (and other) employers on how to calculate the withholding amounts based on a W4. That's what an employer who would withhold taxes will be doing.

Once you figure out how much you think should have been withheld, send the amounts quarterly to the appropriate agencies. Some agencies allow you to pay online (like California or Ohio) or you may be able to get a form that you send in with the amount.

For instance, here is the IRS page for the 1040-ES form (estimated tax). Here is the page for making online payments to the Ohio Department of Taxation.

The standard method for calculating estimated tax payments for federal taxes assumes that you will have steady income throughout the year.

There is a way to adjust the estimated tax amounts if your income has not been or will not be steady throughout year such as having a higher summer income. This is called annualizing and it's discussed in chapter 2 of publication 505.

You can also amend the estimated tax amounts each quarter based on actual income.

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  • Hey thanks for the reply! A follow-up question.. So basically, my friend would make 4 estimated quarterly payments a year and when it comes time to filing her taxes, she would either get a refund or owe more depending on how much she paid? In the meantime, I will research the links you provided. I'll mark your answer correct once I have been able to go through everything. I really appreciate your response!
    – terbubbs
    Commented Aug 8, 2017 at 12:02
  • Yes, that's right.
    – mkennedy
    Commented Aug 8, 2017 at 13:46
  • Hey I was looking at the 2017 Tax Rate Schedule on the 1040-ES and had a question. When you are considering tax rate to use, do you only do it quarterly? For instance, I don't think my friend will make over $9,325 this quarter, but she probably will for the 4th quarter 2017. However, I would think that if my friend's income is in the 10% rate that we should use that when estimating the payment due on September 15th. Is my assumption correct?
    – terbubbs
    Commented Aug 9, 2017 at 16:14
  • Thanks for the updated answer! I will take a look at that link you added.
    – terbubbs
    Commented Aug 10, 2017 at 12:14

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