Updated October 29, 2026. Quick answer: The nanny tax threshold for 2026 is $3,000: a household employee paid that much or more in cash wages in 2026 is covered by Social Security and Medicare. The Social Security Administration published the figure in the Federal Register on November 3, 2025. The 2027 threshold has its own page, the nanny tax threshold for 2027.
More on the 2026 tax figures: the Social Security wage base for 2026.
The 2026 threshold
The Social Security Administration defines the term and states the figure together: “The minimum amount a domestic worker must earn so that such earnings are covered under Social Security or Medicare is the domestic employee coverage threshold. For 2026, this threshold is $3,000.”
| Year | Household employee coverage threshold | Source |
|---|---|---|
| 2026 | $3,000 | Social Security Administration, Federal Register, November 3, 2025 |
| SSA’s unrounded result before rounding down to the next $100 | $3,019.39 | Social Security Administration, Federal Register, November 3, 2025 |
| Statutory base amount before indexing | $1,000 | 26 U.S.C. 3121(x) |
The Schedule H form walk-throughs on this site start at Schedule H household employment taxes.
What the statute says
The rule is in section 3121(a)(7)(B) of the Internal Revenue Code, which leaves out “cash remuneration paid by an employer in any calendar year to an employee for domestic service in a private home of the employer (including domestic service on a farm operated for profit), if the cash remuneration paid in such year by the employer to the employee for such service is less than the applicable dollar threshold (as defined in subsection (x)) for such year”. The wording is “less than”, so wages of exactly $3,000 or more in 2026 are covered, and wages below $3,000 are not.
How the $3,000 is computed
Section 3121(x) sets a base of $1,000 and tells the Commissioner of Social Security to adjust it each year, with 1993 as the comparison year; “If any amount as adjusted under the preceding sentence is not a multiple of $100, such amount shall be rounded to the next lowest multiple of $100.”
The Administration printed its inputs: “Multiplying the 1995 domestic employee coverage threshold ($1,000) by the ratio of the national average wage index for 2024 ($69,846.57) to that for 1993 ($23,132.67) produces $3,019.39. We then round this amount to $3,000.” Our own check of that arithmetic: $1,000 times $69,846.57 divided by $23,132.67 is $3,019.39 (computed), which rounds down to $3,000.
What the threshold is not
It is one test for one tax. It is the Social Security and Medicare coverage test for wages paid to a household employee. Other taxes on household wages, such as federal unemployment tax, are separate and are covered on Schedule H Part II. The Social Security wage base for 2026 is a ceiling on taxed earnings, not a starting point; see the 2026 self-employment tax rates and base and self-employment tax explained.
Common mistakes
- Using the 2025 figure for 2026 wages. For wages paid in 2026 the test is $3,000.
- Adding every household worker together. The statute looks at the cash remuneration an employer pays to each employee.
- Confusing it with the Social Security wage base. The $3,000 decides whether wages are covered at all; the wage base caps how much of a worker’s pay is taxed for Social Security.
Related: Schedule H household employment taxes, Form 1040 line 1b household employee wages, Schedule H Part II, and the nanny tax threshold for 2027.
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Answer againSources
- Social Security Administration, Cost-of-Living Increase and Other Determinations for 2026, 90 Federal Register 49047 (November 3, 2025): www.govinfo.gov
- 26 U.S.C. 3121, Definitions (U.S. Code, 2024 edition, U.S. Government Publishing Office): www.govinfo.gov
Read from the primary documents linked above on October 29, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.