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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 Connecticut, as in other states, the 'nanny tax' refers to federal tax obligations that apply to household employers. If a household employer in Connecticut pays a nanny or other domestic employee $2,300 or more in 2021 (this threshold may change annually for inflation), they are required to withhold and pay Social Security and Medicare taxes. Additionally, if they pay $1,000 or more in a calendar quarter, they must also pay federal unemployment tax. Connecticut also requires employers to pay state unemployment taxes if they pay a domestic employee $1,000 or more in a calendar quarter. Employers are responsible for withholding Connecticut state income tax if the employee requests and providing a W-2 form to the employee at the end of the year. It's important for employers to keep accurate records of payments and taxes as they are subject to the same employment tax requirements as commercial employers.

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Taxes

nanny tax

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Taxes

nanny tax

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