What is the nanny tax?
The nanny tax is nothing more than three federal employment taxes (social security, Medicare and federal unemployment tax) that employers must pay if the wages of certain household workers exceeds a threshold amount. The nanny tax only applies to your employees. A worker is generally considered to be your employee if you directly supervise the work and you supply the tools or supplies necessary to do the job. If your help cames from an agency or runs his/her own business, the nanny tax may not apply. Employees can include babysitters, nannies, housekeepers, gardeners, health aides, and other household workers.
