New York Nanny Tax Guide for 2026: Everything You Need to Know

If you employ a nanny in New York, you're dealing with one of the most comprehensive sets of household employment requirements in the country. New York has strict compliance rules, mandatory workers' compensation, and multiple state-level taxes. But don't worry—we'll break down exactly what you owe, when it's due, and how to stay compliant without the stress.

Quick Overview: What New York Families Owe

As a household employer in New York, you're responsible for:

Federal taxes:

• Social Security (6.2% employer share)
• Medicare (1.45% employer share)
• Federal unemployment (FUTA)
• Federal income tax withholding (if your nanny requests it)

New York state taxes:

• State income tax withholding (required)
• State Disability Insurance (employee-paid, you withhold)
• State Unemployment Insurance (SUI)
• Workers' Compensation Insurance (mandatory)

New York is hands-down one of the most regulated states for household employers. But once you understand the system, it's manageable—and staying compliant protects both you and your nanny.

When Do New York Nanny Taxes Apply?

The federal threshold is $2,700 per year for 2026. If you pay your nanny $2,700 or more in a calendar year, you're a household employer subject to federal payroll taxes.

For New York state taxes:

• State unemployment: You owe if you pay $1,000+ in any calendar quarter
• Workers' comp: Required if you employ anyone for 40+ hours per week

Translation: If you have a regular nanny (even part-time), you're almost certainly subject to both federal and New York taxes.

Breaking Down New York Nanny Taxes

Federal Taxes (Same for All States)

1. Social Security & Medicare (FICA)

• Social Security: 6.2% employer + 6.2% employee = 12.4% total
• Medicare: 1.45% employer + 1.45% employee = 2.9% total

You pay half, your nanny pays half (you withhold their portion).

2. Federal Unemployment Tax (FUTA)

• Rate: 6% on first $7,000 in wages
• Credit: 5.4% if you pay state unemployment on time
• Effective rate: 0.6% = $42/year max

3. Federal Income Tax Withholding Optional unless your nanny requests it via Form W-4. Most nannies do request withholding to avoid a large tax bill in April.

New York-Specific Taxes

1. New York State Income Tax Withholding (REQUIRED)

Unlike federal withholding (which is optional), New York requires you to withhold state income tax for all household employees earning above a minimum threshold.

• Your nanny fills out Form IT-2104 (Employee's Withholding Allowance Certificate)
• You calculate withholding using NYS withholding tables
• Rates vary based on income and allowances claimed
• File quarterly using Form NYS-45 (Quarterly Combined Withholding, Wage Reporting and Unemployment Insurance Return)

2. State Disability Insurance (SDI)

Who pays: Your nanny (you withhold from their paycheck)

Rate: 0.5% of gross wages up to the annual wage base ($120 per week max)

What it covers: Short-term disability benefits if your nanny becomes unable to work due to illness or injury

For 2026, the maximum weekly deduction is $0.60 per week ($120 × 0.5%). This is automatically withheld and paid to the state.

3. State Unemployment Insurance (SUI)

Who pays: You (the employer)

Rate: New employers typically pay 4.025% on the first $12,300 in wages per employee

Max cost: ~$495/year for new household employers

Your rate can change based on your "experience rating," but most household employers stay near the new employer rate since nannies rarely file unemployment claims.

4. Workers' Compensation Insurance (MANDATORY)

New York requires workers' compensation insurance if you employ someone for:

• 40+ hours per week, OR
• Regularly and continuously (even if less than 40 hours)

Cost: Typically $500-1,500/year depending on wages and coverage

You can get household workers' comp through:

• State Fund (NYSIF)
• Private insurance carriers
• Your homeowners policy (some include coverage)

Penalties for non-compliance are severe: Fines up to $2,000 + 15 days in jail for each day without coverage.

What About Federal Taxes?

Don't forget—on top of New York's requirements, you still owe federal nanny taxes:

• Social Security: 6.2% employer + 6.2% employee = 12.4% total
• Medicare: 1.45% employer + 1.45% employee = 2.9% total
• FUTA: 6% on first $7,000 (but credit reduces to 0.6% = $42/year max)

See our complete nanny tax guide for federal details.

Bottom line: Expect to pay about 10-12% of your nanny's wages in employer-side taxes (federal + state combined).

New York Nanny Tax Deadlines

Here's when everything is due:

Quarterly (Every 3 Months)

New York State Taxes (withholding + unemployment):

• Q1 (Jan-Mar): Due April 30
• Q2 (Apr-Jun): Due July 31
• Q3 (Jul-Sep): Due October 31
• Q4 (Oct-Dec): Due January 31

File using Form NYS-45 (Quarterly Combined Withholding, Wage Reporting and Unemployment Insurance Return)

Federal Estimated Taxes (optional):

• Q1: April 15
• Q2: June 15
• Q3: September 15
• Q4: January 15

Use Form 1040-ES if you're making quarterly payments.

Annually (Once a Year)

W-2 for your nanny: Due January 31

Schedule H (with your federal 1040): Due April 15

Form NYS-45-ATT (Annual wage reconciliation): Due with Q4 filing

Workers' Comp Policy: Renew annually

How to Register as a Household Employer in New York

Here's your step-by-step setup:

Step 1: Get a Federal Employer Identification Number (EIN)

You need an EIN to report payroll taxes. It's free and takes 5 minutes online.

See our EIN guide for step-by-step instructions

Step 2: Register with New York State Department of Taxation and Finance

Once you have your EIN:

1. Go to NY.gov Business Express
2. Register as a new employer
3. Select "Household Employer" as your business type
4. You'll receive:
   • NYS Employer Registration Number
   • Unemployment Insurance account number
   • Withholding account number

Step 3: Get Workers' Compensation Insurance

This is mandatory in New York!

Options:

• New York State Insurance Fund (NYSIF): ww3.nysif.com
• Private carriers: Shop around for rates
• Homeowners policy: Check if your policy covers household employees

You'll need your policy number and certificate of insurance on file.

Step 4: Give Your Nanny Tax Forms

Have your nanny complete:

• Form W-4: Federal income tax withholding
• Form IT-2104: New York state withholding
• Form I-9: Verify work authorization (required within 3 days of hiring)

Keep these in your records—you'll need them for payroll calculations.

Real-World Example: What You'll Actually Pay

Let's say you hire a nanny in New York who works 40 hours/week at $20/hour.

Gross wages: $3,467/month ($20/hour × 173.33 hours)

Employer taxes you pay:

• Social Security (6.2%): $215
• Medicare (1.45%): $50
• FUTA (0.6% on first $7,000/year): ~$4/month average
• NY SUI (4.025% on first $12,300/year): ~$41/month average
• Workers' comp: ~$75/month average ($900/year)
• Total employer taxes: ~$385/month

Employee taxes you withhold:

• Social Security (6.2%): $215
• Medicare (1.45%): $50
• SDI (0.5% up to weekly max): ~$14/month
• NY state income tax (varies, estimate ~3%): $104
• Federal income tax (depends on W-4, estimate ~10%): $347
• Total withheld: ~$730/month

Your nanny's take-home: $2,737/month
Your total cost: $3,852/month ($3,467 wages + $385 employer taxes)

Bottom line: Budget about 11% on top of wages for the taxes you pay as the employer.

Common New York Nanny Tax Questions

Do I need workers' comp if my nanny works less than 40 hours/week?

Probably yes. New York requires workers' comp if the employee works "regularly and continuously" even if under 40 hours. Most household employers with regular nannies need coverage.

What if my nanny is a family member?

You still owe taxes in most cases. Exceptions:

• Your spouse
• Your child under age 21
• Your parent (with some exceptions)

If your nanny is your sibling, cousin, or adult child, you owe taxes just like any other household employer.

Can I classify my nanny as an independent contractor?

No. New York (and federal law) have strict rules. If you control what work is done and how it's done, they're an employee. Misclassifying can lead to massive penalties.

Read more: Nanny vs. Contractor

What if I pay my nanny cash?

Paying in cash is fine—but you still owe taxes. "Cash under the table" (unreported) is tax evasion. Use direct deposit instead for a clean paper trail.

Learn how to set up direct deposit

What happens if I don't have workers' comp insurance?

Severe penalties: Fines up to $2,000, potential jail time (15 days per day of non-compliance), plus you're personally liable for any injuries your nanny sustains on the job.

Don't skip this one.

How NannyKeeper Can Help

New York nanny taxes are complex—probably the most complicated in the nation. You're dealing with:

• Federal taxes (Social Security, Medicare, FUTA)
• State withholding tax (NYS-45 quarterly)
• Unemployment insurance (SUI)
• Disability insurance (SDI)
• Workers' comp insurance (annual)
• W-2 generation
• Schedule H filing

NannyKeeper handles all of it for $10/month:

• Automatic payroll calculation (federal + NY taxes)
• Quarterly NYS-45 filings
• W-2 generation and filing
• Schedule H prep for your tax return
• Direct deposit to your nanny's bank account
• Compliance tracking

We calculate, you review and submit. No tax degree required.

Sign up free and see how it works.

What Happens If You Get Audited?

The NYS Department of Labor and Department of Taxation actively pursue unreported household employment. Common triggers:

• Your nanny files for unemployment
• Your nanny files a workers' comp claim and you don't have insurance
• Your nanny reports wages from an unreported employer on their tax return
• Random audit selection

If you get audited without having paid taxes, expect:

• Back taxes: Everything you should have paid (up to 3 years, longer if fraud)
• Interest: Accrues from original due dates
• Penalties:
  • Failure to file: 5%/month, up to 25%
  • Failure to pay: 0.5%/month, up to 25%
  • Workers' comp violations: $2,000+ per violation + potential jail time
  • Willful evasion: Up to 100% of unpaid taxes

For a nanny earning $40,000/year, three years of back taxes could easily cost $18,000-25,000 in taxes, penalties, and interest.

Get compliant now. It's way cheaper than dealing with an audit.

New York vs. Other States

Here's how New York stacks up:

New York is tied with California for the most complex household employment requirements. More paperwork, higher costs, stricter enforcement.

Tips for Staying Compliant in New York

1. Set Up Direct Deposit

Stop writing checks. Direct deposit:

• Creates a clear paper trail
• Ensures timely payment
• Reduces errors

Read our direct deposit guide

2. Keep Digital Records

Save everything for at least 4 years:

• Payroll records (hours, gross, withholdings)
• Bank statements
• Tax forms (W-2, W-4, IT-2104, Schedule H, NYS-45)
• Workers' comp policy and payment receipts

Use cloud storage (Google Drive, Dropbox) for safety.

3. Set Aside Tax Money

Every paycheck, set aside 11% of gross wages in a separate account. This covers your employer-side taxes and ensures you're never scrambling when quarterly deadlines hit.

4. Never Skip Workers' Comp

This is not optional in New York. Get coverage before your nanny starts working. The fines for non-compliance can exceed the cost of coverage itself.

5. File Quarterly, Pay Annually

You can file NYS-45 quarterly but pay your federal taxes annually with Schedule H (as long as you increase your own income tax withholding to cover it). This simplifies cash flow for most household employers.

6. Get Compliant Now If You're Behind

If you've been paying off the books and want to get compliant:

1. Calculate what you owe (use NannyKeeper or a CPA)
2. File back tax returns (NYS-45, Schedule H)
3. Pay what you owe (payment plans available)
4. Get current going forward

The penalties are lower if you come forward voluntarily vs. waiting for an audit.

The Bottom Line

New York nanny taxes are among the most complex in the nation, but they're not impossible. You'll pay:

• ~11% in employer-side taxes (Social Security, Medicare, unemployment, workers' comp)
• ~20-25% withheld from your nanny's paycheck (federal/state income tax, Social Security, Medicare, SDI)

For a nanny earning $3,500/month, expect about $385/month in employer taxes. That's the cost of compliance—and it's far cheaper than the penalties for not paying.

Next steps:

1. Get your EIN (5 minutes, free)
2. Register with NYS Tax & Finance
3. Get workers' comp insurance (mandatory!)
4. Set up payroll (or let NannyKeeper do it)

You've got this. And if you want help, we're here.

Get started with NannyKeeper →

---

Related guides:

• California Nanny Tax Guide
• Texas Nanny Tax Guide
• The Complete Guide to Nanny Taxes
• Schedule H: A Friendly Guide for Household Employers
• Nanny Tax Calculator 2026

---

Have questions? Email us at support@nannykeeper.com or check out our complete nanny tax guide for more details.

New York-Specific Resources

New York State Department of Taxation and Finance

• Website: tax.ny.gov
• Employer Registration: NY Business Express
• Withholding Tax Helpline: 518-485-6654

New York State Department of Labor

• Unemployment Insurance: labor.ny.gov/ui
• UI Employer Hotline: 518-457-9000

New York Workers' Compensation

• State Insurance Fund: ww3.nysif.com
• Workers' Comp Board: wcb.ny.gov

IRS Resources

• Publication 926: Household Employer's Tax Guide
• Schedule H Instructions

Why New York Enforcement Is Strict

New York actively enforces household employment laws more aggressively than most states. Here's why:

1. Workers' Comp Violations Are Criminal

Not having workers' comp insurance is a criminal misdemeanor in New York. The state can (and does) prosecute household employers who don't carry coverage.

2. The "Nanny Tax" Scandal Legacy

Remember the 1990s scandals when political nominees were rejected for not paying nanny taxes? New York hasn't forgotten. The state makes examples of high-profile cases.

3. Strong Labor Protections

New York has some of the strongest worker protection laws in the nation. Household employees are entitled to the same protections as any other worker.

4. Easy to Get Caught

Your nanny will eventually:

• File their tax return (and report wages from an employer)
• Apply for unemployment if laid off
• File a workers' comp claim if injured
• Apply for state disability if they become unable to work

When they do, the state will ask questions. If you haven't been paying taxes, you'll be flagged.

Final Thoughts

New York nanny taxes are comprehensive, expensive, and strictly enforced. But once you understand the system, it becomes routine:

The big picture:

• Federal taxes: Social Security, Medicare, FUTA
• State withholding: Quarterly NYS-45 filings
• State unemployment: 4.025% on first $12,300
• Disability insurance: 0.5% withheld from nanny
• Workers' comp: Mandatory, ~$75-125/month
• W-2 + Schedule H annually

For a full-time nanny earning $40,000/year, expect to pay about $4,400/year in employer-side taxes. That's the cost of doing it legally—and it's way cheaper than the penalties for not paying.

You can do this.

Thousands of New York families employ nannies compliantly every year. Get your EIN, register with the state, get workers' comp, and set up payroll. Or let NannyKeeper handle it for $10/month.

Either way, you'll sleep better knowing you're compliant, your nanny is protected, and you won't face an audit years from now.

Start your free trial with NannyKeeper →

---

Still have questions? Email support@nannykeeper.com or check out our other state-specific guides:

• California Nanny Tax Guide
• Texas Nanny Tax Guide
• Florida Nanny Tax Guide