Am I required to pay nanny taxes?

There are a couple of liability thresholds for nanny taxes. If you pay anyone working in or around your home $2,700 or more in a year, or if you pay $1,000 in a quarter you are considered a household employer by the IRS.

If you pay an employee working in your home $2,700 or more in a year, both you and the employee must pay Social Security and Medicare taxes.

If you pay employees working in your home $1,000 or more in a calendar quarter, you must pay federal and state unemployment taxes (some states like New York have a lower threshold for unemployment tax liability).

These taxes don’t just apply to nannies. Any workers in your home who follow your instructions for performing their duties are covered by these laws. In addition to nannies, it can include babysitters, caretakers, house cleaning workers, domestic workers, drivers, health aides, housekeepers, maids, butlers, private nurses, and yard workers.

See When do I pay my nanny taxes? for more information.

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