A: Federal nanny taxes (Social Security, Medicare, income taxes and federal unemployment) are generally paid with your federal income taxes. State nanny taxes (unemployment and income taxes) are generally paid quarterly. You must provide your employee a Form W-2 by Jan. 31 and file Forms W-2 and W-3 with the Social Security Administration by Feb. 28.
Q: Am I required to withhold federal and state income taxes?
A: You are not required to withhold these taxes unless your employee asks you to and you agree. If you don't withhold, your employee must pay these taxes on her own and may need to make quarterly estimated tax payments.
Q: Can I hire an undocumented worker?
A: No. When you hire a household employee, you and the employee must each complete part of the Immigration and Naturalization Service Form I-9, Employment Eligibility Verification. You must verify the employee is a U.S. citizen or an alien who can legally work in the U.S.
Q: Where do I get information about preparing nanny taxes myself?
A: Consult IRS Publications 926 and 15, known as Circular E. Contact the Oklahoma Tax Commission and Oklahoma Employment Security Commission for information about the state income tax laws and forms to complete.
PAULA BURKES, BUSINESS WRITER