Massachusetts does not require employers to withhold state income taxes for household workers. State income taxes are the employee’s responsibility.
If you pay a household worker $1,000 or more in a calendar quarter, you are required to pay state unemployment insurance. The unemployment insurance tax rate varies depending on previous unemployment claims against the employer. New employers should register with the Massachusetts Division of Labor & Workforce Development. For more information, call 617-626-6800 or visit www.mass.gov/lwd.
Workers’ compensation insurance covers costs such as medical care and lost wages for workers who are injured or killed on the job. In Massachusetts, employers of household workers who work 16 hours or more each week are required to purchase workers’ compensation insurance. For household workers who work fewer than 16 hours per week, you still may want to purchase coverage, since most homeowners insurance policies do not cover claims that would normally fall under a workers’ compensation policy. Without coverage, you could be liable for medical expenses, lost wages, and legal fees if someone is injured while working for you. You can buy a workers’ compensation policy from your homeowners insurance carrier or from an insurance agent.