nanny tax

A nanny tax—also known as a household-employment tax—is not a legal term, but refers to a federal social security tax imposed on the employer of a domestic employee (such as a nanny) if the employer pays the employee more than a specified amount in total wages in a year.

In Alaska, as in all states, the 'nanny tax' refers to federal tax obligations that arise when a household employs someone to do domestic work, such as a nanny. If an employer pays their domestic employee more than the federal threshold amount ($2,400 for tax year 2022), they are required to pay Social Security and Medicare taxes. These taxes are often referred to as 'FICA' taxes. The employer is also responsible for withholding the employee's share of these taxes and reporting both the employee's and the employer's share to the IRS. Additionally, if the total wages paid to the nanny exceed $1,000 in any calendar quarter, the employer must also pay federal unemployment tax (FUTA). It's important to note that these requirements are based on federal law, and while Alaska does not have a state income tax, employers in Alaska must still comply with these federal tax obligations.

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nanny tax

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Alaska State Code

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Taxes

nanny tax

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