The Nanny Tax
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The number if household employees has increased over a ten year time period, but the compliance rate for household employment tax filings has decreased. This study explores different explanations for non-compliance of household employment taxes in the United States. These explanations include detection risk, the employment of illegal immigrants, psychological considerations, the lack of knowledge about household employment taxes, the decrease in household employees affecting compliance rates, and compliance rates based on income and age. The results of a state-to-state comparison have a potential impact on overall compliance. Other explantions have no direct effect on compliance rates.