Household Nanny Tax

Household workers who are under age 18 during any part of the calendar year are exempt from the FICA tax for the entire year even if the wages exceed $1,800 if the household employment is not their principal occupation. A full time student is considered a full time occupation. Household employees include baby sitters, nannies, housekeepers, drivers, caretakers, health aids, private nurses, maids, gardeners, and others who work in or around your private residence as your employees. Workers you get from an agency are not your employees if the agency is responsible for who does the work and how it is done. Self-employed workers are not considered your employees. In the current year, if you paid a household employee cash wages of $1,800 or more in a calendar year, you generally must withhold social security and Medicare taxes from all cash wages you pay to that employee. Household employers must file IRS Schedule H to pay the social security and federal unemployment tax and any withheld federal income taxes. A household employer is not required to withhold federal income tax from a household employee's wages. Federal income tax withholding occurs if the employee requests and the employer agree.