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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 Utah, as in other states, the 'nanny tax' refers to federal tax obligations that apply to household employers. If a household employer in Utah pays a nanny or other domestic employee $2,400 or more in 2023, they are responsible for withholding and paying Social Security and Medicare taxes. These are often referred to as FICA taxes. If the total wages paid to the nanny exceed $1,000 in any calendar quarter, the employer must also pay federal unemployment tax (FUTA). Additionally, Utah employers may be subject to state unemployment taxes and must adhere to state labor laws regarding workers' compensation insurance and other employment-related requirements. It's important for employers to keep accurate records of payments and taxes, and to provide their employees with a W-2 form each year. Failure to comply with these tax obligations can result in penalties and interest charges from the IRS.

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Taxes

nanny tax

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Taxes

nanny tax