Nanny tax is the federal tax that must be paid by the people who hire a house hold help such as a baby sitter, maid or a nanny. The tax is a lot if they pay more than the total of the threshold tax per year.
The ISR charge this amount because of the safety reasons. The house owner who has a nanny is responsible for the tax.
There are certain conditions for the application of the taxes such as if the baby sitter is under the age of 18 there will be no nanny tax. If the nanny is the taxpayer’s parent, spouse, the tax won’t be applied to such conditions. Another way to avoid the tax is that if the taxpayer is hiring the nanny from the agency because under such conditions the agency would be the employer and will pay the tax. Sometimes it is difficult for the house owner to pay the tax but this tension can be minimized if the nanny is already self employed because it will then pay its own tax. A taxpayer is responsible for pay the social security and medical care at the right time. The nanny taxes can be on state levels as well.