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 Kansas, as in all states, the 'nanny tax' refers to federal tax obligations that apply to individuals who employ household employees, such as nannies. If a Kansas employer pays their nanny or other domestic workers more than the federal threshold amount ($2,300 for tax year 2021, subject to change in subsequent years), they are required to pay Social Security and Medicare taxes. These taxes are often referred to as 'FICA' taxes. The employer may also be responsible for paying federal unemployment tax (FUTA) if they pay wages of $1,000 or more in any calendar quarter. Additionally, Kansas employers must comply with state employment tax requirements, which include withholding state income tax and paying state unemployment insurance taxes if certain thresholds are met. It's important for employers to keep accurate records of payments and taxes, as they will need to report this information to the IRS and the Kansas Department of Revenue.