TAX TIPS (and other stuff)
By Kelly J. Bullis, CPA
2026-May 23rd
Every election season, this issue gets trotted out to smear an opponent. Having household help but not paying them correctly. There are a wide variety of potential “employees.” Babysitters, private nurses, other caretakers, cleaning folks, yard workers, and of course, nannies.
The tax law requires you to pay employment taxes if the wages paid to certain household employees exceed a specified annual threshold. The annual threshold in 2026 is $3,000. Notice I keep using that nasty word … “employee”? We’ll address how that is defined later.
Employment taxes that should be paid if the employee exceeded that threshold are, Social Security/Medicare Tax (7.65% withheld from the employee’s wages and you, as the employer, must pay another 7.65%); Federal Unemployment (6.2% on the first $7,000 in wages, but this amount is reduced by a 5.4% credit if you paid all your required state unemployment and disability taxes); State Unemployment and Disability (in Nevada it is about 3.0% on the first $43,700 of wages in 2026); then you must also withhold the properly computed federal income tax from their wages. There are a lot of rules regarding how to file payroll tax reports and how to pay taxes owed. Of course, you can use a payroll service to take care of all this, including payroll tax reporting and paying in the amounts withheld, etc. or you can try to do it yourself. (I strongly recommend you NOT try to do payroll yourself.)
Now, let’s explore what is or is not an “employee.”
Basically, the first level to look at is their status … a US Citizen or not, if not, do they have a VISA/Green Card? Moving on, how much do you control the conditions of their work? (Time start/stop, specific tasks, etc.) Next, do you provide the “tools” they need to do the job or do they provide their own? Another issue to resolve, are you their only “employer” or do they work for multiple other folks? Finally, do they work on their own or are they provided to you by an agency?
You should make sure you know the answer to all of the above issues before you start having a person work in your home. Each one elevates the likelihood of the person being an employee or not. The more you control the times they work and the tasks they do, the more you provide the tools and supplies they use, if you are their only employer, and they are not provided by an agency, you most likely have an employee and need to follow the rules.
If you can get the person to provide you with a form W-9 that states they are self-employed, then you might be able to skip the employee status, but you will still need to provide a form 1099 at the end of the year.
One final exempt group. Your spouse, your child if under age 21, or your parent.
If you are unsure, contact your tax pro and run the whole thing by them. They can help you navigate through this thorny area of tax law.
Have you heard? Prov 29:21 says, “He who pampers his servant from youth will have him become a son in the end.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 775-882-4459. As well as on our website at BullisAndCo.com. You can also find us on LinkedIn and Facebook.
