In 2025, the nanny tax threshold will increase to $2,800, up from $2,700 in 2024. This means families who employ a nanny and pay them $2,800 or more in a calendar year are required to comply with household employment tax obligations, including paying Social Security and Medicare taxes, as well as potentially state unemployment insurance.
For nannies, this ensures contributions toward their future benefits and safeguards their rights as employees. Employers should update payroll systems and consult a tax professional if necessary to ensure compliance with federal and state laws. Both parties benefit from maintaining a transparent, legal employment relationship.
he IRS has announced the standard mileage rates for 2025, effective January 1. The rate for business use of a personal vehicle will increase to 70 cents per mile, up from 67 cents in 2024. Nanny employers often use the business mileage rate to reimburse employees for work-related vehicle use.
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