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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 South Carolina, as in all states, the 'nanny tax' refers to federal tax obligations that apply to individuals who employ household workers, such as nannies. If an employer pays a nanny or other household employee $2,300 or more in 2021 (this threshold may change annually for inflation), the employer must withhold and pay Social Security and Medicare taxes. These taxes are often referred to as FICA taxes. Additionally, if an employer pays total wages of $1,000 or more in any calendar quarter to household employees, they must also pay federal unemployment tax (FUTA). Employers are responsible for reporting these taxes on their federal income tax return using Schedule H. It's important to note that these requirements are based on federal law, and while South Carolina does not have additional state-level 'nanny taxes,' employers in SC must still comply with federal tax obligations.

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Taxes

nanny tax

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Taxes

nanny tax

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