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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 New Hampshire, 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 household employer pays their nanny or other domestic workers more than the threshold amount set by the Internal Revenue Service (IRS) for a given tax year ($2,300 for 2021, subject to annual adjustments for inflation), they are required to pay Social Security and Medicare taxes. These taxes are often referred to collectively as 'FICA taxes' and are 15.3% of the wages, which is typically split equally between the employer and the employee, each paying 7.65%. If the employer pays wages of $1,000 or more in any calendar quarter, they are also responsible for paying federal unemployment tax (FUTA). Employers are required to file Schedule H with their federal tax return to report these taxes. It is important to note that these requirements are based on federal law, and New Hampshire does not have additional state-level 'nanny tax' obligations beyond what is mandated federally.

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Taxes

nanny tax

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New-Hampshire State Code

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Taxes

nanny tax

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