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

Massachusetts has a flat 5% income tax (with an additional 4% on income over $1 million) and a robust Paid Family and Medical Leave program that most employers must participate in.

State unemployment insurance (SUI). Massachusetts requires household employers to register and pay state unemployment tax once you cross the federal $1,000/quarter threshold (some states use a lower threshold — California is $750/quarter, New York and DC are $500/quarter). New-employer rate range in Massachusetts: 0.56% - 18.54%. Missing the registration is one of the most common audit findings — the simulator flags it as soon as your quarterly wages cross the threshold.

State income tax withholding. Massachusettshas state income tax, which means you may need to withhold from your nanny's paycheck (it depends on whether they elect withholding on the state W-4 equivalent). If they do, you owe quarterly remittance and an annual state W-2 reconciliation. The simulator flags missing withholding setup or unreported wages.

Paid Family Leave (PFL). Massachusetts runs a state-administered PFL program that applies to household employees. These are typically funded by employee withholding (some states add an employer contribution) and require separate registration and remittance from FICA/FUTA. The simulator flags missing setup or under-withholding.

Minimum wage. The minimum wage in Massachusetts is $15.00/hour. If you paid below this rate, the simulator surfaces it as a Department of Labor exposure — separate from tax findings, and often more expensive (back wages plus liquidated damages).

Run the audit above to see exactly which Massachusetts rules apply to your situation — each finding comes with dollar exposure and a concrete next step.