What would the IRS flag about how you've been paying your nanny?

Connecticut SUTA runs 1.1% - 9.9% by claims history, with a separate rate for new employers.

• You owe it once you pay $1,000 in any calendar quarter (the federal household-employer threshold)
• Filings are usually quarterly, with an annual reconciliation
• Your assigned rate moves over time, depending on whether former employees file unemployment claims

Usually not. Connecticut has a state income tax, but withholding it from a household employee is optional unless your nanny asks for it.

• It is usually optional, and your nanny elects it on Connecticut's W-4 equivalent
• If they do elect it, you owe quarterly remittance to the state and an annual reconciliation return that includes the W-2 you issued

At least $16.94 an hour for a nanny in Connecticut.

• That is Connecticut's own minimum wage, above the federal $7.25 floor
• Connecticut raises it to $17.48/hour from January 1, 2027
• Overtime is 1.5x pay for hours over 40 in a week, under the FLSA
• Live-in nannies are exempt from FLSA overtime, but not from minimum wage

US DOL, State Minimum Wage Laws

Yes, paid family leave. Connecticut Paid Leave covers household employees.

• Funding rules vary: some states are employee-funded, some split it between employer and employee
• You register and remit for it separately from unemployment insurance

These are the findings that come up most often for Connecticut household employers.

• Treating a household worker as a 1099 contractor when their schedule and duties make them a W-2 employee under IRS Publication 926
• Missing Connecticut unemployment insurance registration after crossing $1,000 in any calendar quarter (the federal household-employer trigger)
• Under-withholding Connecticut state income tax when the employee has elected withholding on the state W-4 equivalent
• Missing registration or under-withholding for Connecticut Paid Leave
• Paying below $16.94/hour or skipping FLSA overtime, which is a Department of Labor (not IRS) finding

Federal exposure layers on top of all of these: no Schedule H filed, no W-2 issued, no EIN, and any FICA underpayment.