How the Nanny Tax Works for Household Employers in 2026

Lucas and Luna unpack the so-called nanny tax — the legal obligations when you hire a household worker like a nanny, housekeeper, or caregiver. In 2026, the threshold for paying Social Security and Medicare taxes is $2,800 in cash wages per year, up from $2,700 in 2025. They walk through the forms you need: Schedule H attached to your 1040, and an employer identification number from the IRS. They discuss common mistakes like misclassifying workers as independent contractors and the state-level requirements for unemployment insurance and workers' comp. Lucas shares a story about a family in Seattle who faced a $6,000 penalty for failing to file Schedule H for three years. The episode also covers the nanny tax's impact on college financial aid and the earned income tax credit. A practical guide for any family hiring help. #NannyTax #HouseholdEmployer #ScheduleH #PayrollTax #SocialSecurity #Medicare #EIN #IndependentContractor #Misclassification #FinancialAid #EITC #UnemploymentInsurance #WorkersComp #IRS #TaxPenalty #Finance #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo