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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 Oregon, as in all states, the 'nanny tax' refers to federal tax obligations that apply to individuals who employ household employees, such as nannies. If an 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 change in subsequent years), they are required to pay Social Security and Medicare taxes. These taxes are collectively known 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. In addition to federal obligations, Oregon employers must also comply with state employment taxes, which include state unemployment insurance taxes and, in some cases, workers' compensation insurance. Employers are required to withhold the employee's share of Social Security and Medicare taxes from their wages unless they agree to pay both the employer's and employee's share. It is important for employers to keep accurate records of payments and taxes as they may be required to provide their employee with a W-2 form and file the appropriate reports with tax authorities.

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Taxes

nanny tax

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Taxes

nanny tax

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