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Can a Nanny in this case file for unemployment?


ETax847

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I had a lady call me today asking for help in helping her file for unemployment.  She nannied for a family until March 15 of this year, and then left to start work at a day care as a W-2 employee.  As a nanny she was paid in cash.  The daycare laid her off after 1 week due to the coronavirus pandemic.  Is she eligible to file for unemployment?

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I found this online:

 

Who pays for unemployment benefits?

Unemployment benefits are paid out by the state using a portion of the payroll taxes that employers should be paying regularly. “Assuming that the family has been paying their required unemployment taxes throughout the time that the employee worked for them, the state will pay the employee directly, and it does not come to the family in the form of a bill,” explains Mills.

But if, for some reason, you were paying your nanny “under the table” and not taking out the necessary taxes, the nanny would not be eligible for unemployment benefits, and you would then be liable for paying all back taxes, penalties, and interest.

Does that impact anything if she was paid under the table?

 

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Of course it impacts things if she was paid under the table. Hopefully, she documented all dates, amounts, etc., and is reporting the family to the IL DOL. Did she work for the family during 2019 and receive a W-2?

And, she worked as an employee in her second job.

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It's also possible that she was paid in cash, but it was all properly reported and a W-2 issued.  Then she'd be eligible with no issues.  My first job ever, I got a pay envelope every week, cash inside, and a stamped outside with all the withheld taxes listed.  LOL; that was a LONG time ago!  $71.01 per week for 40 hours, and I lived on it AND saved for school.  

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13 minutes ago, Roberts said:

I'm not an unemployment "expert" and I'm not an expert on the stimulus payments or the PPP loans. Am I supposed to be? People ask me questions but it has really next to nothing to do with what I do.

I send 'em all to the IRS site for Coronavirus updates, https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments and then the state unemployment board.  Yes, we're telling people ALL The time (1) the rules are changing weekly, and (2) we don't know.  But we're also asking people to make note of any payment they get, in case we need to know next year.

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That seems reasonable. On the PPP I told them they needed to talk to a banker which seemed to confuse them.

Paying income tax on unemployment always ticks me off. So many people don't withhold and then next April are stuck unable to come up with the funds because they were unemployed. Grrrrrrr. I know nothing about applying so I tell them to go to the state website but they always think I know.

 

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24 minutes ago, Roberts said:

That seems reasonable. On the PPP I told them they needed to talk to a banker which seemed to confuse them.

Paying income tax on unemployment always ticks me off. So many people don't withhold and then next April are stuck unable to come up with the funds because they were unemployed. Grrrrrrr. I know nothing about applying so I tell them to go to the state website but they always think I know.

 

Not withholding taxes is very common, I have seen so many of my clients go through this, the worst one I have seen, a trucker received unemployment for the allowed time, the employer brought the driver back and was paying cash, two years later TP gets a notice he did report XXX on a 1099 and shortly after the department of employment security wanted their money back (double dipping).

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