State-by-State Nanny Tax Requirements: What Household Employers Must Know

Why State Taxes Matter for Household Employers

Federal nanny tax rules are the same no matter where you live -- but state requirements vary dramatically. Some states have no income tax at all, while others require household employers to register for multiple programs, withhold state income tax, and file quarterly reports. Understanding your state's specific requirements is just as important as knowing the federal rules.

Failing to comply with state requirements can result in penalties, back taxes, and problems for your employee when they try to claim unemployment or disability benefits. This overview covers the major categories of state obligations and highlights the states with special requirements.

State Income Tax Withholding

Most states with an income tax require employers to withhold state income tax from employee wages. However, the rules for household employers specifically can differ from those for business employers. Some states exempt household employers from withholding if the employee requests it, while others make it mandatory above certain thresholds.

States With No Income Tax

Nine states have no state income tax, which simplifies your obligations significantly:

• Alaska
• Florida
• Nevada
• New Hampshire (taxes interest and dividends only, not wages)
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming

If you live in one of these states, you do not need to worry about state income tax withholding. However, you still have state unemployment insurance obligations in most cases.

States With Income Tax

The remaining 41 states and the District of Columbia impose a state income tax. In most of these states, you should provide your nanny with a state equivalent of the federal W-4 so they can specify their withholding preferences. Check your state's revenue department website for the correct form and withholding tables.

State Unemployment Insurance (SUI)

Nearly every state requires household employers to pay state unemployment insurance when they meet certain wage thresholds. These thresholds vary by state but are often lower than the federal $1,000-per-quarter FUTA threshold.

SUI rates also vary significantly:

• New employer rates typically range from 1% to 4% depending on the state.
• Wage bases range from $7,000 (matching the federal FUTA base) to over $60,000 in some states.
• Filing frequency is usually quarterly, though some states allow annual filing for household employers.

Registering for SUI is critical because it also affects your FUTA credit. If you fail to pay state unemployment taxes, you lose the 5.4% FUTA credit and owe the full 6.0% federal rate instead of the typical effective 0.6% rate.

New Hire Reporting

Every state requires employers to report new hires to a designated state agency, usually within 20 days of the employee's start date. This requirement applies to household employers just as it does to businesses.

New hire reporting helps states enforce child support orders and detect unemployment insurance fraud. The information you need to report typically includes your employee's name, address, Social Security number, and your EIN.

States With Additional Requirements

Several states go beyond basic income tax and unemployment insurance, requiring household employers to participate in additional programs.

California

California requires household employers to register with the Employment Development Department (EDD) and participate in:

• State Disability Insurance (SDI): Employee-paid, withheld from wages at approximately 1.1% in 2026.
• Paid Family Leave (PFL): Funded through SDI contributions; provides wage replacement when employees need time off for family care.

New York

New York has some of the most extensive requirements for household employers:

• Disability Benefits Law (DBL): Employers must provide disability insurance coverage. You can purchase a policy from a private carrier or the State Insurance Fund.
• Paid Family Leave (PFL): Employee-funded through payroll deductions; provides job-protected paid leave.
• Workers' Compensation: Required for all household employees.

New Jersey

New Jersey requires participation in several programs:

• Temporary Disability Insurance (TDI): Shared cost between employer and employee.
• Family Leave Insurance (FLI): Employee-funded through payroll deductions.
• Workers' Compensation: Required for household employees.

Hawaii

Hawaii requires employers to provide Temporary Disability Insurance (TDI) to household employees, covering partial wage replacement for non-work-related illness or injury.

Other Notable States

• Washington: Requires participation in the WA Cares Fund (long-term care) and Paid Family and Medical Leave (PFML) programs.
• Massachusetts: Has its own Paid Family and Medical Leave (PFML) program with employer and employee contributions.
• Oregon: Launched Paid Leave Oregon, requiring contributions from most employers including household employers.

How to Find Your State's Requirements

NannyLedger provides detailed state-by-state compliance guides covering registration requirements, tax rates, filing deadlines, and special programs for all 50 states and the District of Columbia. Each guide is tailored specifically for household employers and updated to reflect current rules.

Stay Compliant Across Every State

State nanny tax requirements add complexity to household employment, but they do not have to be overwhelming. NannyLedger tracks your state's specific obligations, calculates the correct withholdings, and reminds you of filing deadlines so nothing falls through the cracks.

Whether you live in a no-income-tax state like Texas or a high-regulation state like New York, NannyLedger gives you the tools and guidance to stay compliant. Get started today.