What are nanny taxes?
When you hire someone to work in your home, the government considers you an employer. As an employer you are responsible for paying employment taxes. These taxes are commonly known as "nanny taxes". There are two components of nanny taxes: the employer contribution and the employee withholding.
The employer contribution includes Social Security, Medicare, New York Unemployment and Re-employment taxes and federal Unemployment taxes. The employee withholding includes Social Security and Medicare and possibly, federal, state and city income taxes.
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