Do I Have to Provide a W9 to My Babysitter?

Do I Have to Provide a W9 to My Babysitter?
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A W-9 form is the IRS's way to gather information from independent contractors who must file a 1099 form at tax time. Unless your babysitter takes care of your children in her own home and sets her own procedures, she is not considered an independent contractor so you do not need to provide a W-9. Instead, she is a household employee and different tax laws and forms apply to the situation.

Household Employees

The IRS categorizes a babysitter as a household employee. This means that you are the sitter's employer. If you pay your sitter more than $1,700 in the calendar year, you must withhold Social Security and Medicare taxes or pay them yourself on the sitter's behalf. This requires submitting W-2 forms to the sitter, the IRS and any appropriate state agencies at the end of the year. Babysitters you pay less than $1,700 (as of 2011) per calendar year do not require either a W-9 or a W-2.

Federal Taxes

If you pay more than $1,000 to your babysitter in any calendar quarter, you must pay unemployment taxes to the federal government. These cannot be withheld from the sitter's wages. Instead, you must pay them from your own funds, based on a percentage of the sitter's wages. You are not required to withhold federal income taxes from any household employee, including babysitters, but you can do so if you and the sitter agree to it. In this case, the sitter must provide you with a completed W-4 form, after which you are responsible for withholding taxes and sending them to the appropriate government agencies.

Teenage Babysitters

If your babysitter is under 18 years old at any point during the current tax year or is your own older child up to age 21, you do not need to file tax paperwork, according to the IRS. The exception to this is if the babysitter's primary job is babysitting. If your sitter is a full-time student under 18 who babysits to earn extra money, being a student is considered the sitter's primary occupation, regardless of lack of other employment, so the sitting is still tax-exempt.

Special Situations

You and your sitter may have a special situation that requires individual attention, such as a sitter under 18 whose primary income is from sitting, or a sitter who cares for the child in her own home. Consult a tax adviser if you feel your situation is not covered in the basic IRS guidelines. These guidelines also change regularly, so to be sure you have the most accurate information, look for the current version of IRS Publication 926 and fill out Schedule H in your tax forms to ensure you are reporting payments correctly.