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

Virginia SUTA base tax rates run 0.1% - 6.2% for household employers. Virginia starts a new employer at 2.5% and then adds charges that change every year and aren't published in advance, so your actual rate is the one on the notice Virginia mails you each December, or in your Employer Self-Service account.

• 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. Virginia 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 Virginia'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 $12.77 an hour for a nanny in Virginia.

• That is Virginia's own minimum wage, above the federal $7.25 floor
• Virginia raises it to $13.75/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

Not yet. Virginia's paid family and medical leave program starts collecting contributions on April 1, 2028, and it covers household employers.

• A household that paid $1,000 or more in wages to a nanny or other household employee in any calendar quarter this year or last is an employer for it
• From that date you withhold half the contribution from your nanny's pay and send it in; a household pays no share of its own
• The deduction can never take your nanny's pay below the minimum wage

These are the findings that come up most often for Virginia 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 Virginia unemployment insurance registration after crossing $1,000 in any calendar quarter (the federal household-employer trigger)
• Under-withholding Virginia state income tax when the employee has elected withholding on the state W-4 equivalent
• Paying below $12.77/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.