Nanny Tax DeskNanny tax threshold for 2026
Two federal lines decide it. Pay one household worker $3,000 or more in cash in 2026 and Social Security and Medicare apply to all of it. Pay $1,000 or more to all household workers in any quarter of 2025 or 2026 and federal unemployment applies. States set their own lines.
General information from IRS Publication 926, not tax advice. Check with a tax professional for your household.
Just under the line: $2,900
- Social Security and Medicare$2,900 is under $3,000, so $0 for both of you, and no W-2 unless you withheld income tax.
- Federal unemploymentIf $1,000 or more of it was paid in one quarter, you owe 0.6%: $17.40. If no quarter reached $1,000 in 2025 or 2026, you owe nothing.
- Cross $3,000 in DecemberThen all of the year's pay counts, from the first dollar, not just the amount over.
Who is left out
- Your spouse, and your child under 21.
- Your parent, in most cases; Publication 926 lists the exceptions.
- A worker under 18 at any time in 2026, for Social Security and Medicare, unless household work is their main job. A student's is not.
California, for one, counts household employers from $750 in a quarter. See the California page.
General information from IRS Publication 926 (2026), not tax advice. Check with a tax professional for your household.
Questions people ask next
Is the $3,000 per worker or for everyone?
Per worker. Two sitters paid $2,000 each are both under it. The $1,000 federal unemployment test adds up all household workers.
Did the threshold change for 2026?
Yes. It is $3,000 for 2026; it was $2,800 for 2025. The IRS sets it each year.
Do noncash benefits count?
Food, lodging and similar noncash pay don't count toward Social Security and Medicare wages.
Does the threshold apply to a caregiver for my parent?
Yes, the same lines apply to any household employee. See caregiver taxes.