What Nannies Should Know About Taxes in 2026

If you work as a nanny, you're a household employee. That means taxes apply to your wages — and understanding them puts you in control of your money.

What Taxes Come Out of Your Paycheck?

Every pay period, your employer withholds two types of taxes from your gross pay:

FICA taxes (required)

If you earn $800 per week, about $61 goes to FICA taxes. Your employer pays another $61 on top of that — you never see their share, but it goes into the system under your name.

Federal income tax (optional but recommended)

Your employer can also withhold federal income tax based on your W-4. This isn't required for household employees, but most nannies prefer it because it avoids a large tax bill in April.

State income tax (varies)

If your state has an income tax, your employer may withhold that too. Nine states have no income tax at all (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming).

Why Legal Pay Matters for You

Being paid "on the books" isn't just about following the law. It directly protects your financial future:

Social Security credits

Every legally paid paycheck adds credits to your Social Security record. You need 40 credits (roughly 10 years of work) to qualify for retirement benefits. If you're paid in cash with no records, those years don't count.

Unemployment insurance

If your employment ends — whether the family moves, the children age out, or anything else — you're eligible for unemployment benefits. Nannies paid under the table have no safety net.

Income verification

Need to rent an apartment? Apply for a car loan? Get a mortgage? Lenders and landlords need proof of income. Pay stubs and W-2s are the standard proof. Cash payments don't count.

Accurate tax filing

With proper withholding, you won't owe a surprise tax bill in April. Your employer handles the math throughout the year, and your W-2 tells you exactly what was earned and withheld.

What You Should Expect From Your Employer

If your employer is doing things right, here's what you should receive:

• A W-4 to fill out — This tells your employer how much federal income tax to withhold. It takes about 3 minutes.
• Regular pay stubs — Every pay period, you should see a breakdown of gross pay, taxes withheld, and net pay.
• A W-2 by January 31 — This is your tax document for filing your own return. It shows total wages and taxes withheld for the year.
• Consistent, documented payments — Whether by check, direct deposit, or payment app with records.

What If Your Employer Doesn't Withhold Taxes?

If you earn above the $3,000 threshold and your employer isn't withholding taxes, you're both at risk:

• You may owe a large tax bill when you file your return, plus penalties for underpayment
• Your employer faces IRS penalties for not withholding and reporting employment taxes

The good news: it's never too late to start. Many families just don't realize they're required to handle nanny taxes. You can share our nanny tax guide for employers with them.

How to File Your Own Taxes

As a household employee, you file your personal tax return (Form 1040) just like any other worker. Your W-2 from your employer provides the numbers you need.

If you have only one employer and your W-4 is set up correctly, filing is straightforward. You can use free tax software like IRS Free File, or a paid service like TurboTax or H&R Block.

Key dates for 2026:

• January 31 — Your employer must provide your W-2
• April 15 — Federal tax return due
• State deadlines — Vary by state, but most align with the federal deadline

The Bottom Line

Understanding your taxes isn't just about compliance — it's about protecting yourself. Every paycheck that's properly documented builds your retirement benefits, strengthens your financial record, and gives you a safety net if you need it.

You work hard. You deserve the protections that come with legal employment.