Nanny Tax Guide for 2026: household employer tax basics
Hiring a nanny or caregiver is not just a personal arrangement. In many cases it makes you a household employer, which brings federal and state payroll responsibilities even if the work is part-time or short-term.
This guide is for parents and household employers who want a practical overview of the basics. It covers the main rules around Social Security, Medicare, FUTA, and year-end forms without turning into a full tax manual.
What this guide helps you understand
- Who counts as a household employer
- What Social Security, Medicare, and FUTA usually involve
- Which year-end forms household employers commonly need
What NannyPayStub helps with
The generator helps you create a simple nanny paystub in your browser. It shows gross pay, Social Security, Medicare, and net pay, but it does not replace payroll software or tax filing help.
Open the Paystub GeneratorAre you a household employer?
If you hire a nanny, housekeeper, caregiver, or similar worker and you control what work is done and how it is done, the IRS generally treats you as a household employer rather than a client hiring an independent contractor.
Before you get too far
State registration, unemployment insurance, and filing rules can differ. Federal guidance is only part of the picture, so you should verify the requirements where the work is actually performed.
If you need a simple paystub while reviewing the basics, you can create one here.
Pre-tax setup
1. Complete and retain Form I-9
Verify that your employee is authorized to work in the United States. Have them complete Form I-9, review the original documentation, and keep the record for your files.
2. Apply for an EIN
Before filing payroll-related tax forms, apply for an Employer Identification Number through the IRS: Apply for an EIN.
3. Understand state unemployment tax rules
State registration and unemployment insurance requirements differ. Register and comply with the rules where you employ the worker.
4. Set up basic records
- Track hours worked and pay periods.
- Maintain records of each payment made.
- Keep documentation for any dependent care reimbursement process.
Payroll tax obligations
Dependent Care Flexible Spending Account (DCFSA)
If your employer offers a DCFSA, you may be able to use pre-tax dollars for qualifying childcare expenses. Limits vary by filing status and tax year.
- Annual contribution limits can change each year.
- Some plans have use-it-or-lose-it rules.
- Paystubs may be required for reimbursement.
Use the NannyPayStub nanny paystub generator if you need a simple paystub for documentation.
Social Security and Medicare (FICA)
If you pay a household employee $3,000 or more in 2026, you generally need to withhold and pay:
- 6.2% Social Security tax on the employee side.
- 1.45% Medicare tax on the employee side.
- A matching employer share of 6.2% Social Security and 1.45% Medicare.
You may choose to pay the employee share yourself, but it should still be accounted for correctly.
Federal income tax
Federal income tax withholding is not required for household employees, but it may be withheld if the employee asks and you agree.
Federal Unemployment Tax (FUTA)
- FUTA is generally owed if you pay $1,000 or more in any calendar quarter of 2025 or 2026.
- The base rate is 6% on the first $7,000 of wages.
- You may receive up to a 5.4% credit if state unemployment taxes are paid on time in most states.
How to pay and file
Household employment taxes are typically reported annually on Schedule H, which is filed with your personal federal tax return.
- Report withheld FICA taxes if applicable.
- Report the employer share of FICA.
- Report FUTA obligations.
You may want to adjust your regular withholding or make estimated payments to avoid a large bill at tax time.
State unemployment taxes
State unemployment filing schedules and payment deadlines vary. Review your state agency rules and file on time to preserve potential FUTA credits.
Reminder
This guide is a starting point. State-specific registration, tax rates, and deadlines can change, so verify the current rules before relying on any checklist.
Issue W-2 and W-3 forms
At year-end, household employers typically need to:
- Provide Form W-2 to the employee by the filing deadline for the following year.
- Submit Form W-2 and Form W-3 to the Social Security Administration by the same deadline.
- Ensure paystub totals reconcile cleanly with year-end filings.
Key deadlines and checkpoints
Before you start paying
- Confirm household employer status.
- Get an EIN if needed.
- Check state registration requirements.
During the year
- Keep each paystub accurate.
- Watch when Social Security and Medicare apply.
- Check state unemployment deadlines if required.
At year-end and tax time
- Give Form W-2 to your employee.
- Submit W-2/W-3 information on time.
- Report household taxes on Schedule H.
When you need the paystub itself
Paying a nanny legally is manageable when you understand the basics and keep the details organized. NannyPayStub does not replace payroll software or tax filing help, but it can help you create a simple browser-based nanny paystub when you need one.
If you are ready to make the paystub, go to the paystub generator. If you want the broader product overview first, start on the homepage.