It is based on what you pay her.
If you paid your nanny $2,000 or more in 2018, you should withhold and pay Social
Security and Medicare on all of her wages. If you paid your nanny $1,000 or more in a quarter in 2018, you must pay
the federal unemployment tax, or FUTA. (You may also
owe state unemployment taxes.)
Generally, for 2018 an employer
needs to pay Social Security and Medicare taxes for “cash wages” of $2,000 or
more paid to any one employee. Cash wages refer to checks, money orders and the
like. They don’t include “the value of food, lodging, clothing, transit passes
and other noncash items you give your household employee.” But cash given to an
employee in place of those items counts as cash wage.
Don’t count wages paid to your
spouse or your child under 21, the IRS says. Wages paid to your parent
typically don’t apply, either, although there are exceptions.
Don’t count wages paid to an
employee under 18 at any time during the year, unless providing household
services is “the employee’s principal occupation,” the IRS says.
