New Federal Income Tax Rate for Nannies

From: 4nannytaxes.com

New Nanny Federal Income Tax Withholding Rates
President Obama announced over the weekend that the new Federal income tax rates reflecting the $400/person tax cut in the stimulus bill, will become effective April 1, 2009.

HomeWork Solutions will have the new rates available on our website's Nanny Tax Calculator no later than Friday February 27, 2009. A nanny's Federal income taxes will go down approximately $10/week on average through December 2009. They will nudge back up a bit in 2010. Long time employers will recall that we had a similar mid-year withholding adjustment in 2002 when the Bush tax cuts were enacted.

Nanny employers who make a predictable weekly or periodic payment to the nanny are advised that they should continue paying with their current net calculation through the end of the 1st quarter (3/31/2009) and begin making new net check payments effective the first pay period in April 2009.