The short answer is no. Nannies cannot file Form 1099 because they’re not considered “independent contractors” – instead, they are considered household employees and should receive a W-2 statement just like an employee of a company. We always recommend seeking the advice of a tax planner or payroll provider to ensure the proper adherence to all applicable laws. Our preferred nanny payroll provider is HomeWork solutions (https://www.homeworksolutions.com/partners/tammygold/)
Why is a Nanny Considered an Independent Contractor?
In this instance, an independent contractor is someone who provides their services to another entity under terms specified in a contract or within a verbal agreement. Unlike an employee, an independent contractor does not work regularly for an employer but works as and when required. Furthermore, in the case of an independent contractor, the employer has no control over how the services are rendered. This is clearly not the case for nannies. Nannies work regularly for the same employer and the employer tells them when and how to perform their tasks. Independent contractors typically provide their own tools to perform their services – in this instance, nannies do not bring any tools to their job.
Why Is a Nanny Considered an Employee?
Under common-law rules, anyone who performs services is considered an employee if their employer can control what will be done and how it will be done. What matters is that the employer has the right to control the details of how the services are performed. In this instance, the family (the employer) determines what the nanny does during the day and how she performs her tasks. The family determines her schedule, her duties, and provides her with the necessary tools to get her job done properly.
It is always wise to consult your tax professional to get specific advice and strategies for handling your particular situation…but the rule really is that your nanny is considered an employee and not an independent contractor.