Should family members who are acting as a nanny be considered "employees" for tax purposes?

For tax purposes, the IRS is fairly clear on when you need to withhold, file and pay the appropriate payroll taxes for your nanny or any other household help. You do not have to pay Social Security and Medicare taxes if your situation meets any of the following conditions: If your nanny is a spouse, a parent, a child under the age of 21 or anyone under the age of 18. When any of these conditions are met you won’t have to withhold and pay Social Security and Medicare taxes. Here’s a link to the IRS’s http://www.irs.gov/publications/p926/ar02.html#en_US_2013_publink100086732, which covers the rules. In general, if you pay your household employee $1,900 or more in 2014 ($1,800 in 2013) for the year or $1,000 or more per quarter, you’ll need to pay the household employment tax, which is commonly referred to as the nanny tax for those with nannies.   Should you ever need payroll help, take a look at SurePayroll. I work there and parents have found our services very convenient and affordable.