Taxes for Domestic Help

If you employ domestic help, such as a housekeeper, babysitter, or cook, you may be required to pay Social Security (FICA), Medicare, and unemployment taxes for those employees. FICA tax is due on a household employer’s 1040 for wages paid to domestic employees. There is an exception for annual cash wages of less than $2,200 in 2020. To avoid under-payment penalties, increase your quarterly estimated payments or increase withholdings from your own annual wages to pay these amounts due.

Federal unemployment taxes (FUTA) are due for any household employees whom you hired during the year and to whom you paid $1,000 in cash wages in any calendar quarter this year or last year. Unless you also pay the appropriate state unemployment taxes, the maximum Federal rate may be assessed. Contact us with questions about your liability, as exemptions and special rules may apply.