Select your state

Taxes

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 Tennessee, 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 a nanny or other household employee cash wages of $2,300 or more in 2021 (this threshold can change annually), the employer must withhold and pay Social Security and Medicare taxes. These taxes are 15.3% of cash wages, with the employer and employee each paying half, unless the employer chooses to pay the employee's share as well. Federal unemployment tax (FUTA) may also apply if the employer pays $1,000 or more in any calendar quarter to household employees. Employers are required to file Schedule H with their federal tax return to report these taxes. It's important to note that these requirements are based on federal law, and there are no specific Tennessee state laws that alter the federal requirements for household employment taxes.

Legal Articles

State Statutes

Individual & Family Legal Plan

As a LegalFix member, you'll get expert legal services from a local law firm that treats you like an important client. Don't wait—be prepared for life's inevitable legal challenges starting today. And ask your employer, credit union, or membership group about preferred pricing opportunities.

Taxes

nanny tax

Individual & Family Legal Plan

Articles

Tennessee State Code

Tennessee State Code

Articles

Taxes

nanny tax