Finding helpful Montana nanny tax information is not always easy. That’s why we’ve combined all the state and federal tax and labor law information you’ll need. Check out the information below that HomePay is here to help with.*
Checklist for Montana household employers
We know you’re busy so here’s a quick “to-do” list with links to extra details below.
Beginning of employment
- Verify caregiver’s work eligibility.
- Set up EIN & state tax account(s).
- Obtain workers’ compensation insurance.
- Display employment posters.
During employment
- File returns, remit taxes and manage correspondence.
- Pay at least Montana minimum wage.
- Pay overtime, when it applies.
Optional benefits for your employee
Ending employment
- Provide a termination notice, if requested.
- Manage unused paid time off.
- Close down your state employment tax account(s).
- Maintain payroll records.
Beginning of employment
Verify caregiver’s work eligibility
Before your employee begins to work, you need to fill out Form I-9 to verify they’re eligible to work in the U.S. The I-9 does not get sent to any government agency but must be presented to authorities if your nanny or senior caregiver’s employment eligibility is ever questioned.
Set up EIN & state tax account(s)
You must first apply for a EIN (Employee Identification Number) with the IRS. This will be used as your unique ID with both state and federal tax authorities. Then you can open an account with your state taxing authority.
Workers’ compensation
Household employers in Montana are not required to carry a workers’ compensation insurance policy, but we recommend doing so. These policies pay for medical expenses and lost wages if an employee has a work-related injury or illness. Obtain an instant quote and purchase a policy online, or contact our partner, Clarke White, at 804-267-1210 or wcnanny@allrisks.com.
Employment posters
Families in Montana are required to notify their employee of their rights by sharing these posters.
During employment
File returns, remit taxes and manage correspondence
- File state employment tax returns throughout the year and remit state employer and employee taxes.
- Remit federal employer and employee taxes via 1040-ES estimated tax payment voucher four times each year.
- Each year end, prepare Schedule H and file with Form 1040; prepare and distribute Form W-2 to each employee; file Form W-2 Copy A/Form W-3 with the Social Security Administration (SSA).
- Manage ongoing alerts and notices from the state (tax rates and labor law is subject to change at any time).
Minimum wage rate
The current minimum wage in Montana is $10.30/hour.
Montana overtime requirements
- Live-out employees must be paid 1.5x their hourly rate for all hours worked over 40 in a workweek.
- Live-in employees are not required to be paid overtime.
- Overtime is not required to be paid when work is performed on a holiday.
Optional benefits for your employee
Health insurance
Families with only 1 employee can make contributions toward their employee’s health insurance premiums and treat the amount as non-taxable compensation. In this scenario, neither the employee nor the employer are required to pay any taxes on that portion of the compensation.
Families with 2 or more employees have 3 options:
- Set up an Individual Coverage Health Reimbursement Arrangement (ICHRA).
- Set up a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA).
- Purchase a policy through SHOP (Small Business Health Options Program).
Visit our health insurance page for more information about these options.
Mileage reimbursements
The current federal mileage reimbursement rate is 67 cents per mile and only covers miles driven by your employee while on the job. Miles driven commuting are not eligible for reimbursement.
Ending employment
Termination notice requirement
Household employers in Montana are only required to provide a written termination notice if their employee requests it.
Managing unused PTO
Montana household employers do not need to pay their employees for unused sick time, but they do need to pay out any unused vacation time.
Close down your state employment tax account(s)
The state tax agencies expect you to file timely returns for as long as your tax accounts are open — even to report $0 in wages paid.
Maintain payroll records
Household employers are required to keep wage records on file for at least three years.
* HomePay can assist with a wide range of the above-listed household tax and payroll needs; however, some state-specific requirements may not be fully supported. Ask a HomePay representative for more information.
The information contained in this article is general in nature, may not be applicable to your specific circumstances, and is not intended to be a substitute for or relied upon as personalized tax or legal advice.