Elder Care Household Employment Taxes
Elder Care Household Employment Taxes
Frequently Asked Questions
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I have a domestic (aide, elder care giver, housekeeper) working in my home. What taxes do I need to pay?
The following information applies to household workers whom you pay directly. If you contract these services through a third party and make all payments to the third party you are not legally the employer of the caregiver.
In general, the Internal Revenue Service requires payroll tax filings by a domestic employer who pays a household employee directly more than $1700* cash wages in a calendar year. These payroll tax obligations may include:
- Social Security & Medicare Taxes (7.65% of Gross Wages)
- Federal Unemployment Tax (FUTA) (0.8% of Gross Wages or less in Most Circumstances)
- State unemployment and disability insurance taxes levied on the employer.
- Advance payment of the earned income credit for eligible employees.
Examples of job titles that are typically considered household employees include aide, companion, housekeeper, cleaning lady (individual), maid, cook, personal assistant, household manager, caretaker, butler, valet, and driver. We provide more information about distinguishing a household employee from an independent contractor here.
(* The wage payment threshhold that obligates a family to pay the nanny taxes is indexed and has changed many times over the years. It is $1700 for 2009 and 2010. The 2008 threshold is $1600.)
For More Information contact HomeWork Solutions, Inc.
at 1-800-NaniTax or e-mail and submit a question.
