An employer who has household employees is required to withhold which of the following?

In the context of household employees, the employer is required to withhold both Social Security and Medicare taxes from their wages. This requirement stems from the IRS guidelines that consider household employees—such as nannies, caretakers, or housekeepers—as employees rather than independent contractors.

Employers must pay Social Security and Medicare taxes (often referred to as FICA taxes) if they pay a household employee $2,400 or more in cash wages during the calendar year (as of the 2023 tax year). These taxes are intended to ensure that the employee receives benefits in terms of retirement and healthcare from these funding sources.

While employers may also choose to withhold federal income tax from the employee’s wages, it is not mandatory unless the employee requests it and the employer agrees. Therefore, it is correct to state that the primary tax withholding requirement for an employer with household employees consists solely of Social Security and Medicare taxes. Thus, this choice accurately reflects the withholding obligations that apply in this scenario.