THE SHORT ANSWER IS NO, NANNIES ARE NOT INDEPENDENT CONTRACTORS.
A friend recently commented that she was so glad she didn't have to deal with taxes for her afternoon nanny. After all, her nanny worked only 15 hours a week and also had another family she worked with. My friend assumed this placed her in the independent contractor status.
A lot of folks think that caregivers are independent contractors if they work less than 20 hours, have another job or have other families they work with. But hours worked or other side jobs have nothing to do with the designation. In the eyes of the IRS, the type of work and who controls it, almost always makes the caregiver your employee. For example, if a Nanny was an independent contractor, then SHE would decide what to feed your child, what to do during the day, how to discipline your child... you get the picture.
Examples of household employees include:
• Nannies and babysitters
• Housecleaning workers, maids and housekeepers
• Health aids, senior caregivers and private nurses
• Caretakers, drivers and yard workers
It's really important to understand this because if you are paying under the table, not even intentionally, you are vulnerable to risks. Risks include paying medical costs out of your own pocket, which could be financially devastating for a family. Paying over the table protects you, and here's how it does that.