I’m talking about US law, and teenaged babysitters - is it technically illegal to hire them? (No taxes/SS/etc. paid, late night working hours potentially in violation of child labor laws, etc.)
Most US states exempt in-home child care from child labor and occupational safety laws. Technically, your babysitter should be reporting his/her (okay, her) income, but it’s not your problem if she doesn’t.
ETA: That assumes that your arrangement is on a strictly part-time basis. The exemptions are usually limited to arrangements in which the sitter works 25 or fewer hours per week.
Regarding taxes, you’re not required to withhold any taxes from what you pay to a babysitter who is under 18 years of age. The babysitter is supposed to report the income to the IRS, but most minors don’t make enough money babysitting to actually owe income tax on the income. This information applies to federal taxes; state income tax may apply.
In practice, no teenage babysitters report their income and no tax authority goes after them.
Short answer to the OP: no.
From the IRS website
http://www.irs.gov/businesses/small/article/0,,id=117613,00.html
**Babysitting:**If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you
Childcare providers: If you provide child care, either in the child’s home or in your home or other place of business, the pay you receive must be included in your income. If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it.
Does anyone have any verified information about the situation in the UK?
This makes me wonder if, hypothetically speaking, control freak parents who leave a detailed schedule and list of things which must be accomplished (ie: “4:00 - help with homework, 5:00 - dinner, 6:00 - bath time, 6:30 - reading time, 7:00 - TV time, 8:00 - bedtime”) would be pushing their babysitters into the “employee” category by the “subject to the will and control” clause. I had a few like that.
(Off-topic, so no reply expected – ) That’s an interesting fact! This would seem to put some jobs, like those folks at Google or the like who are hired just to sit around comfy sofas and think big thoughts, in a potentially legal gray area.
The question whether someone is an employee or an independent contractor (and is thus self-employed) in the US is usually decided according the the common law control test. I used to make such decisions when working for Social Security. Here’s a link to their Regulations that describe in detail the factors to be considered.
I don’t think this is too much of a hijack: What about paying the neighbor kid 30 bucks to mow your lawn? Same exemptions?
That is great information … about the babysitter.
The OP was asking about the tax / regulation situation for the buyer of babysitting services.
This (pdf) http://www.irs.gov/pub/irs-pdf/p926.pdf is the official Word on how the buyer should treat babysitters. It seems the Feds lean towards treating them as part time employees, not contractors.
Summmarizing mightily and assuming you treat your sitter(s) as employee(s):
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If you pay any one sitter > $1700 / year, you must deal with SS & medicare taxes. That means you withold the employee portion & pay the employer & employee portions to the IRS. And provide a W-2 at year end. This doesn’t apply if the sitter is both under age 18 & a student.
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If you pay all sitters collectively > $1000 in any calendar quarter, you must pay federal unemployment tax for that quarter. There is no exemption for under-18s for this.
If you want to characterize your sitters as contractors …
See http://www.irs.gov/businesses/small/article/0,,id=99921,00.html for the details of determining employee vs. contractor.
Employer or employee social security taxes are only relevant if the sitter is an employee. So you’re off that hook.
Per (pdf) http://www.irs.gov/pub/irs-pdf/i1099msc.pdf the buyer would have to file Form 1099-Misc with the IRS for each sitter they paid more than $600/year to. They’d also have to provide the sitter a copy. If they paid less than $600 to any one sitter, no reporting for that sitter is required.
Finally, the Feds also warn that you are liable for complying with any state tax laws.
Yes and no. Depending on how you pay them, a kid mowing your lawn will probably also be considered an independent contractor, but certain things will create an employment rather than simple contract relationship.
What those things are depends on the state; usually it’ll be some combination of the IRS/Social Security factors Petek linked to.
In Florida, the factors are listed in F.S. §440.02(15)(d) [for employer liability and workers’ compensation purposes, but the same factors are considered in other employment/contractor determinations even though they aren’t listed in the other relevant statutes]:
The things I bolded are the big ones; if you pay the kid on an hourly basis, and he uses your lawnmower, you might actually be employing him.