How to Create a W-2 For Your Nanny

Online W-2

Click to create and file your W-2 online

Learn how to create a W-2 for your nanny and file it with the government.

Creating a W-2 for your nanny

The W-2 is the document the IRS developed for employers to report taxable wages to employees and the government. The process of creating and filing your nanny’s W-2 has been greatly simplified thanks to the Social Security Administration (SSA). On their website, you can easily create a W-2, file it, and make copies to give to your nanny – all for free.

The SSA shares the information with the IRS, so you only need to report wages once (unless your State has an income tax). The process is fairly intuitive and you should be able to follow along with the SSA sites without trouble. You can create a W-2 at the SSA website here. If you run into trouble, the SSA has created a detailed guide explaining everything.

Information you will need

  1. Your nanny’s social security number, name, and address.
  2. Your employer ID number
  3. Records from the nanny tax calculator.
    • Total wages paid
    • Total federal income tax withheld, if any
    • Total social security tax withheld
    • Total medicare tax withheld
  4. Any state or city income tax withheld

A simple explanation of the W2

A few pointers will help you along the way:

  • The W2 is a six part form. Each form contains the same information, but they are intended for different parties. Copy A goes to the SSA. Copy 1 goes to your State or city tax department if they impose an income tax. Copies B, C, and 2 are for your nanny. Keep Copy D for your records.
  • If you paid your nanny only cash for wages, then the boxes you will need to fill out are highlighted in yellow below (and in green for states with an income tax). Wages (Box 1), Social security wages (Box 3), and Medicare wages (Box 5) should all be the same amount.

W-2 Guide

The W-3

You must also complete Form W-3, which acts as a cover letter for your W-2. The W-3 is created and submitted to the SSA at the same time as the W-2. It requires virtually the same information as the W-2, so it is not difficult to complete. The major difference is Box B, shown below. You should select “Hshld emp.” (household employee) for Kind of Payer and “None apply” for Kind of Employer.

W3 Guide

After completing and submitting your W-2 to the SSA, but sure to pass on Copies B,C and 2 to your nanny. The deadline for distributing W-2s is January 31st, 2012.


Next step: Tax Credits