A nanny tax—also known as a household-employment tax—is not a legal term, but refers to a federal social security tax imposed on the employer of a domestic employee (such as a nanny) if the employer pays the employee more than a specified amount in total wages in a year.
In Florida, as in all states, the 'nanny tax' refers to federal tax obligations that apply to individuals who employ household employees, such as nannies. If a household employer pays their employee more than the threshold amount set by the Internal Revenue Service (IRS) for a given tax year ($2,300 for 2021, subject to annual adjustments for inflation), they are required to pay Social Security and Medicare taxes. These taxes are often referred to collectively as 'FICA' taxes. The employer may also be responsible for paying federal unemployment tax (FUTA) if they pay wages of $1,000 or more in any calendar quarter. Household employers in Florida must also comply with any applicable state employment laws, but there is no separate state 'nanny tax.' However, employers should be aware of their obligations to report wages and withhold taxes, including potentially withholding state unemployment insurance taxes if applicable.
