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

District of Columbia SUTA runs 1% - 7% by claims history, before District of Columbia's separate administrative assessment, with a separate rate for new employers.

• You owe it once you pay $500 in any calendar quarter (lower than the federal $1,000)
• Filings are usually quarterly, with an annual reconciliation
• Your assigned rate moves over time, depending on whether former employees file unemployment claims

Yes, for a nanny who lives in the District of Columbia. DC's Office of Tax and Revenue says you must register with it and withhold DC income tax from a household employee who lives in DC.

• DC withholding does not reach a nanny who lives outside the District
• You report what you withhold on Form FR-900Q, under a federal EIN

DC Office of Tax and Revenue, Employer Withholding Tax FAQs

At least $18.40 an hour for a nanny in District of Columbia.

• That is District of Columbia's own minimum wage, above the federal $7.25 floor
• 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. District of Columbia's paid family leave program 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 District of Columbia 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 District of Columbia unemployment insurance registration after crossing $500 in any calendar quarter (lower than the federal $1,000)
• Under-withholding DC income tax for a household employee who lives in the District
• Missing registration or under-withholding for District of Columbia's state disability and/or paid family leave program
• Paying below $18.40/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.