800-929-9213The Social Security Administration (SSA) announced yesterday that the nanny tax threshold for 2016 will increase to $2,000, up from $1,900 this year. This affects all employers of domestic workers – if you pay your employee at least $2,000 in 2016, you are required to pay Social Security and Medicare taxes (also known as FICA coverage). These tax rates will remain the same for 2016 as they are now – 6.2% for Social Security and 1.45% for Medicare.
A coverage threshold are wages that are required to be taxed under the Social Security program. Earnings that are less than the threshold amount are not subject to Social Security and Medicare taxes, but also do not count toward future benefits.
For more information and to learn how GTM keeps families compliant with tax and labor laws, contact us at (888) 432-7972.
