A new federal tax law passed this summer, and it includes a provision that could include tax savings for household employees—but only if you know the detail. The One Big Beautiful Bill Act (OBBBA) includes a “No Tax on Overtime” rule, and although it doesn't directly change household payroll practices, it does impact tax reporting and employee tax credits.
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When hiring a live-in nanny or other household employee, it’s important to understand how overtime laws apply—especially because the rules aren’t the same in every state. While federal law offers a basic framework, many states add their own requirements, and these can impact how you structure your employee’s hours and pay.
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