Question

Nanny tax

Forum|Forum|6 years ago
January 13, 2020
1 reply
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Does nanny tax only apply if you pay your nanny in cash? What if I buy my nanny groceries or other items in exchange for watching my kids. Is that considered tax evasion?

H

HelenC12

The groceries or other items have a cash value and are considered cash wages. Per IRS Topic No. 756 Employment Taxes for Household Employees, Cash wages include wages you pay by check, money order, etc.

If a nanny or other household employees earn $2,100 or more in cash wages in 2019, Social Security and Medicare taxes, or “nanny taxes,” must be paid by the family and the employee. See Social Security Employment Coverage Thresholds.

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