April 18, 2008, Newsletter Issue #111: FUTA Nanny Tax Rules
Tip of the Week
The FUTA nanny tax isn't as expensive as the FICA tax. Generally, FUTA is required based on the first $7000 of a nanny's wages for a year. This rule applies, however, only if you pay $1000 or more in wages in any calendar quarter of the current or previous year. This nanny tax rule only applies to nannies who aren't your parent, spouse, or your under-the-age of twenty-one child. It is important that you pay your state unemployment tax by April 15 each year. In doing so, your nanny's FUTA will typically only be 0.08%. However, for anyone who fails to pay the state unemployment tax, the FUTA for nannies is 6.2% of their wages.
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