Nanny Tax Threshold $2000 for 2017

You remember all the famous cases about politicians not reporting domestic employees for Social Security taxes? The unofficial term is the "nanny tax." The rule, as announced by the Social Security Administration, is quite simple. If you pay any individual domestic employee, such as a house cleaner gardener or babysitter less than $2000 per year, it does not have to be reported to the Social Security Administration and you do not have to collect and remit Social Security taxes. This is on a per employee basis. So, for example if you had one babysitter that you paid $1800 to during the course of the year and another one that you paid $1000, even though the combined total is $2800, more than $2000, you still do not have to report that. On the other hand if it were just one employee hired for $2800 you would have to report the entire $2800 and withhold Social Security and pay the employer's matching portion.

See the Social Security administration official announcement:

https://www.ssa.gov/OACT/COLA/CovThresh.html

Popular posts from this blog

Trump's tax plan

New Jersey Division of Taxation Closes Restaurant - leaving employees and customers stuck

115th Congress - Will we get Tax Reform and Simplification?