Health Insurance Tax Credit for Nannies

The Best Nanny Newsletter recently reported how a nanny needed to get insurance desperately and did not know how to approach her employer. Tom Breedlove of Breedlove & Associates was a big help. Apparently by going to Health Reform In Action web site you can find the most affordable individual health insurance in your state. The next step would be to get your employer to send in the health insurance premiums. This cost is then considered not taxable income. Is is better to have an employer send the premiums to obtain lower taxable income than to add the health insurance to the end of the year medical expense deduction. The employer eventually benefits with tax credit. Small employers who contribute to their employer's health insurance are entitled to a tax credit. So in addition to being non-taxable form of compensation, health insurance contributions made by a nanny employer turn into tax credits.

Nannies and housekeepers are less aware of how they could obtain health insurance without costing them or their employer too much money. Their employers usually do not consider providing this benefit to their nannies or housekeepers. Since providing benefits to domestic workers is not mandatory, it is rarely discussed. In New York, the Domestic Workers United organization was instrumental in establish laws to support domestic workers. The Domestic Workers Bill of Rights reforms New York State law to guarantee basic work standards and protections for the nannies, caregivers and housekeepers who keep New York families functioning. The Bill of Rights was signed by Governor Patterson on August 31, 2010 and went into effect November 29, 2010.

As it relates to "Health Benefits", the guidelines are that Employers should pay or contribute to employees' health care. This arrangement should be mutually agreed upon. Their contention is that housekeepers and nannies are particularly vulnerable due to their exposure to toxic cleaning products and also illness, and that for this reason, employers of domestic workers must provide medical insurance for the employee.

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