Our demanding careers and busy lives sometimes leads us to hire someone to help us out around the house. If you have hired a nanny, housekeeper, elder caregiver, personal assistant, or any other person to provide services in your home you might become a household employer. What does it mean?
The Internal Revenue Service requires payroll tax filings by a household employer who pays a household employee more than $1800 cash wages in calendar year 2013 (in 2014 this threshold increased to $1900). The requirement for state employment tax filings is different, and is determined by wages paid in a calendar quarter.
These household payroll taxes are collectively referred to as “nanny taxes“, although as a practical matter these employment taxes are applied to all US employees.
Nanny Tax Video Tutorial (100 SECONDS)
The employer’s nanny payroll tax obligations may include:
- Social Security & Medicare Taxes
- Federal Unemployment Tax
- State unemployment and disability insurance taxes levied on the employer
Your household employee contributes to or pays:
- Social Security & Medicare Taxes
- Employee Disability/Unemployment Taxes where required
- Federal/State Income Taxes
The EMPLOYER is solely responsible for the remittance of the Social Security and Medicare taxes.
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