How paid sick leave, expanded Family and Medical Leave Act, tax credits, and more can affect you and your nanny during the coronavirus pandemic
During the past few weeks, the federal government passed both the Families First Act and the CARES Act in order to help those affected by the COVID-19 virus. Aspects of these new laws apply to household employers, including paid sick and family leave for your nanny, expanded unemployment insurance benefits for your nanny, and employer tax credits. We know understanding every detail of these new laws can be confusing, and you may be left wondering just what do you need to do to correctly pay your nanny, manage her time off, and ensure everything is done legally.
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What You Need to Know About Employing a Nanny During Coronavirus
1. Unemployment insurance benefits have been expanded.
Both the CARES Act and the Families First Act expand unemployment insurance benefits for your nanny if you have to let her go because of the coronavirus. Assuming your nanny is eligible, he can receive an extra $600 per week, on top of what the state pays, for up to 4 months. Additionally, the amount of time your nanny can receive unemployment benefits is extended by 13 weeks.
2. Your nanny is eligible for paid sick leave, if needed.
Under the Families First Act, if your nanny contracts the coronavirus, she can receive up to 80 hours of paid sick leave while she recovers. Your nanny may also use paid sick leave if he can’t work because one of his family members becomes ill.
3. The Family and Medical Leave Act has been expanded.
The Families First Act also allows your nanny to take up to 12 weeks of expanded FMLA (paid family leave) if she cannot work because her child’s school or day care is closed due to the coronavirus. The first 2 weeks of FMLA can be unpaid, but the remaining 10 weeks are paid at two-thirds of your nanny’s regular hourly rate.
4. You can receive tax credits for your nanny’s paid sick or family leave.
The Families First Act provides reimbursable tax credits to help you offset the cost of providing paid sick leave and paid family leave to your nanny. The amount will depend on the type of leave your nanny needs to take.
- If your nanny is sick, you can receive up to $5,110 in tax credits for paid sick leave
- If your nanny needs to care for a sick family member, you can receive up to $2,000 in tax credits for paid sick leave.
- If your nanny cannot work because his child’s school or day care is closed due to the coronavirus, you can receive up to $10,000 in tax credits for paid family leave.
5. Your nanny may be eligible for an economic stimulus package payment.
The CARES Act may provide your nanny with a one-time payment of up to $1,200 ($2,400 if she’s married), plus an additional $500 for each child she have. She just needs to have a Social Security Number and have filed a 2018 or 2019 tax return to receive this payment. The IRS is distributing these stimulus payments via direct deposit if it has bank account information on record, or will mail a check to your nanny’s home.
An Important Reminder About Paying Nannies Legally
The employer tax credits, unemployment benefits, and stimulus payments all come with the caveat that families must be paying their nannies legally to be eligible. Both the IRS and the state need to have record of your nanny as a taxpayer and you as a household employer before any assistance is given. If you’ve paid your nanny off the books, a household employer payroll service, such as Care.com HomePay, can provide assistance. Due to the IRS extending the 2019 tax filing deadline to July 15, 2020, such services can get you caught up on your tax requirements so both you and your nanny can be eligible for the benefits highlighted above.
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Care.com HomePay is the leading provider for nanny and tax payroll services, serving 60,000 families over the past 25 years. It is highly rated with 96 percent of its customers recommending the services. Since 1992, HomePay has filed more than $2 million in tax filings and processed more than $4 billion through its payroll services. HomePay helps simplify the household employer and caregiver relationship by saving time and stress. Along the way, if you ever have a question, HomePay has award-winning staff waiting to help. There is no question too small and no problem too big for its experts. Call at 877-367-1976 today for your free consultation or visit care.com/homepay for additional information.
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