Hal_Al
Level 15

Deductions & credits

TIA, if she works in your home, no social security or medicare (FICA) tax is due (the grandparent exception to the nanny tax).

If she works in her home, she is not a "nanny" (household employee). She is self employed and must pay both the employer and employee share of FICA.  But, she can deduct expenses including the day care provide vesion of a home office.