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

South Carolina exempts domestic services performed in a private residence from state income tax withholding under S.C. Code Ann. § 12-8-520(C)(2). Household employers don't withhold South Carolina state income tax from their nanny's paycheck.

State unemployment insurance (SUI). South Carolina requires household employers to register and pay state unemployment tax once wages cross its applicable threshold. New York and DC use $500 per quarter; many states use $1,000. New-employer rate range in South Carolina: 0.06% - 5.4%. Missing the registration is one of the most common audit findings — the simulator flags it when your quarterly wages cross the applicable threshold.

No state income tax withholding. South Carolina does tax individual income, but it exempts wages for domestic service in a private home from withholding, so there's nothing to deduct from your nanny's paycheck on the state side. Your nanny still reports those wages on their own South Carolina return. You owe the federal baseline (FICA, FUTA, Schedule H) and any SUI obligation.

Minimum wage. The minimum wage in South Carolina is $7.25/hour (federal). 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 South Carolina rules apply to your situation — each finding comes with dollar exposure and a concrete next step.