As tax season kicks off for 2026, families who employ a nanny, senior caregiver, or other household worker have specific responsibilities when it comes to filing their 2025 taxes. Unlike a traditional business, household employment brings its own set of tax forms, deadlines, and compliance requirements—many of which are easy to overlook without a clear plan.
Whether you're managing this for the first time or just need a refresher, here’s what you need to know to wrap up the 2025 tax year smoothly and legally.
Reminder: Every household’s tax situation is unique. For advice specific to your income, deductions, or credits, always consult your personal tax professional.
What You’re Responsible for as a Household Employer
If you paid a household employee $2,800 or more in 2025, you have household employer tax obligations when filing this tax season. That means you’ll need to file specific forms and may be eligible for certain tax credits. Lower thresholds apply to federal and state unemployment insurance, as detailed below.<
1. Provide a Form W-2
You must give your household employee a W-2 by January 31, 2026. This document shows total wages paid and taxes withheld (if any)for the year. You must also file a copy of this information with the Social Security Administration.
2. Include Schedule H With Your Tax Return
Schedule H is used to report household employment taxes when you file your personal return (Form 1040). This form calculates your owed Social Security, Medicare, and federal unemployment (FUTA) taxes.
3. Unemployment Insurance (FUTA and SUTA)
Household employers are required to pay Federal Unemployment Tax (FUTA) if they pay $1,000 or more in wages in a calendar quarter. The FUTA tax rate is 6.0% on the first $7,000 of wages per employee, but most employers receive a credit of up to 5.4% if their state is in good standing with the federal program, lowering the effective FUTA rate to 0.6%. Household employers also pay State Unemployment Insurance (SUTA). SUTA thresholds and rates vary by state, but many states require registration once you pay $1,000–$1,500 in a quarter, with rates typically ranging from 1% to 5%, and in some cases, higher depending on experience rating. Both taxes are paid entirely by the employer and help provide unemployment benefits for eligible workers.
Tax Credits May Apply—Ask Your Tax Professional
You may be able to reduce your tax bill through certaincredits related to your household employee, including:
- Child and Dependent Care Tax Credit
- Dependent Care Flexible Spending Account (FSA) reimbursement
- State-specific household employment credits
To claim these, you’ll need your Employer IdentificationNumber and to have paid your employee “on-the-books”.
Key Deadlines for 2026
|
Deadline |
What’s Due |
|
January 31 |
W-2 delivered to employee and filed with SSA |
|
April 15 |
Schedule H filed with your personal tax return |
|
Quarterly (if required) |
Estimated tax payments based on prior year income |
A Few Common Questions
Q: Do I need to issue a 1099 instead of a W-2?
No. Household workers, such as nannies and private-hire senior caregivers, are almost always considered employees, not independent contractors. Issuing a 1099 could put you at risk of misclassification penalties.
Q: What if I didn’t withhold taxes during the year?
Household employers are not legally required to withhold income taxes fromtheir employees. Doing so, however, is recommended and generally preferred bythe employee. They will still owe income taxes, and this allows them to paythose taxes into the system in smaller increments throughout the year.
If you didn’t withhold the employee’s share of social security and Medicare taxes, it is too late to do so now. You will need to fund those taxes for past wages. The taxes you fund to cover social security and Medicare for your employees are considered taxable income, so ensure that it is taken into account on year-end tax forms. You will also still owe your share of Social Security, Medicare, and all employer FUTA taxes. These can be calculated and reported on Schedule H.
Q: Can I claim the Child and Dependent Care Credit?
Most likely, if you meet income and work-related criteria. Your tax advisor can guide you based onyour full financial picture.
Wrapping Up
Being a household employer comes with tax-time tasks that many families aren’t aware of, but handling them correctly protects you from costly mistakes and ensures you and your employee get the credits and benefits you’re entitled to.
If you're unsure where to begin, a qualified householdpayroll provider can manage the forms and filings for you, so you can stayfocused on your family without the paperwork headaches.
Want a stress-free way to manage W-2s, Schedule H, andpayroll compliance?
Talk to one of our household payroll and tax specialists, who specializes in household employment. The consultation is complimentary, and it makes a world of difference.