We employed a nanny this summer. For child and dependent care credit, do I enter the wages we paid the nanny? Including taxes paid, or not?

[Andrew-S-]

Also, there is a following section where it asks whether I have paid employment taxes.  I have, but I believe I already took care of that in the "Nanny or Household Employees" section, which essentially is the Schedule H information , which I have from the payroll company.  When I enter the taxes paid in information in the child/dependent care section, my amount due goes up?

Finally, since the payroll company already withdrew the taxes from my account and sent to the IRS, where do I account for the fact that was already paid?  It does not seem like the Sch H accounts for that...it just shows the liability.

I sincerely appreciate your help.

Thank you,

Andrew

[DianeW · Accepted solution]

The Schedule H does handle the employment taxes as far as adding them to your tax return for the amount of wages you paid the Nanny. The payments you made for those taxes are entered as an estimated tax payment as shown below.

The child care credit information does have to be entered, otherwise TurboTax doesn't know that you are eligible. Include the payroll taxes and the amount paid to the nanny.

Next, if your payment of the payroll taxes for the nanny have been paid by your payroll company you need to enter those payments as estimated tax payments on your tax return.  The estimated tax payments you made aren't handled with the "nanny tax" form Schedule H, where the actual tax is calculated. If you enter the estimated payments and you have another question, please add a comment or add a new question.  

• Click the image attached to enlarge and view for assistance.

Enter any federal, state or local estimated tax payments you’ve made under Estimates, in the Estimates and Other Taxes Paid section. You'll find this section in Deductions & Credits under either the Federal Taxes tab or the Personal tab, depending on the product. For a shortcut, type “estimates paid” in the search box and use the “Jump to” link.

[Andrew-S-]

Thank you Diane!  That clears up most of what I was trying to figure out.  I was able to find the estimated tax voucher for federal from the payroll company and get it entered.  I added the federal and state taxes (did not have ES voucher, ok?) to the amount we paid the nanny for our child care expenses.  

I guess one semi-confusing point that I want to confirm is that I enter myself (the EIN I setup) as a care provider, correct?

[DianeW]

@Andrew S.  No, you use the Nanny's SSN on the child care credit. Your EIN is only used on Schedule H for your federal income tax return. You don't need the vouchers as long as the payroll taxes were paid as estimated tax payments attached to your SSN.

[Andrew-S-]

Great.  Will do.  Thank you!