No, Care.com does not take out taxes. The platform matches families with nannies and other in-home caregivers but plays no role in payroll, withholding, or employment paperwork. Once you pay a caregiver $3,000 or more in cash wages during a calendar year, the IRS treats you — not Care.com — as the household employer, and the responsibility for Social Security, Medicare, and unemployment taxes lands on you.
Why You’re the Employer, Not Care.com
The IRS looks at control. If you set the caregiver’s schedule, decide what work gets done, and provide the supplies to do it, that worker is your employee rather than an independent contractor, no matter what informal arrangement the two of you have made.1Internal Revenue Service. Family Caregivers and Self-Employment Tax Care.com is a matching service. It never becomes the employer of record, so every payroll and tax duty stays with the family.
Treating a household employee as a contractor to avoid paperwork is risky. If the IRS reclassifies the worker later, you can owe back Social Security and Medicare taxes — including the employee’s share — plus interest and failure-to-file and failure-to-pay penalties.2Internal Revenue Service. Worker Classification 101: Employee or Independent Contractor
When Household Employment Taxes Actually Kick In
Not every payment triggers taxes. Two different thresholds do most of the work.
Social Security and Medicare
Pay a household employee $3,000 or more in cash wages during 2026 and you owe FICA — a combined 15.3% of cash wages. You pay half (7.65%) and withhold the other half from the employee’s paycheck. You can also choose to cover the employee’s share yourself rather than withholding it.3Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
Federal Unemployment (FUTA)
FUTA has its own trigger. If total cash wages to household employees reach $1,000 or more in any calendar quarter of 2025 or 2026, you owe FUTA tax on the first $7,000 of each employee’s yearly wages.3Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide The statutory rate is 6.0%, but most employers claim a 5.4% credit for state unemployment payments, dropping the effective rate to 0.6%. Miss the state deadline and you lose part of the credit.4Internal Revenue Service. FUTA Credit Reduction FUTA is entirely on the employer; nothing comes out of the caregiver’s paycheck.
Federal Income Tax
You are not required to withhold federal income tax from a household employee. If the caregiver asks and you both agree, you can withhold based on their Form W-4.3Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
Family Members You Don’t Owe Tax On
Some relatives fall outside these rules even above the dollar thresholds. You do not owe Social Security, Medicare, or FUTA on wages paid to your spouse, your child under 21, or your parent (with a narrow exception when your parent cares for your child under 18 and you are divorced, widowed, or living with a spouse who cannot care for the child). An employee under 18 is also exempt from Social Security and Medicare unless household work is their principal occupation.3Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
What to Set Up Before the First Paycheck
Before payroll runs, gather a few things:
- Form W-4 from the employee, if you have agreed to withhold federal income tax.3Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
- Form I-9, completed by both of you, with acceptable ID documents verified — for example, a passport, or a driver’s license paired with a Social Security card.3Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
- The employee’s Social Security number, recorded exactly as it appears on the card. Ask no later than the first day you pay wages.3Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
- An Employer Identification Number (EIN), which you’ll need to file Schedule H and issue Form W-2. Apply online at IRS.gov/EIN for an immediate number, or submit Form SS-4 by fax or mail.5Internal Revenue Service. Instructions for Schedule H
Keep employment tax records for at least four years after filing: Forms W-2, W-4, I-9, pay stubs, and any correspondence with the IRS.6Internal Revenue Service. Employment Tax Recordkeeping
State Taxes, Workers’ Comp, and Wage Rules
Federal isn’t the whole picture. Most states require household employers to register for a state unemployment insurance account once wages hit $1,000 in a calendar quarter, though individual state rates and thresholds vary.7U.S. Department of Labor, Employment and Training Administration. Unemployment Insurance Tax Topic Many states also require workers’ compensation coverage for household employees, with rules that differ widely. Contact your state workforce agency and state labor department early — some states also grant domestic workers rights like paid rest days or expanded overtime.
Federal wage law applies too. Under the Fair Labor Standards Act, most household employees must receive at least the federal minimum wage for all hours worked, plus overtime at one and a half times their regular rate for hours over 40 in a workweek. Live-in employees (generally those who live, work, and sleep in your home at least five days or 120 hours per week) are exempt from the overtime requirement but must still earn minimum wage for every hour. Hiring through a home care agency removes that live-in exemption, and the agency must pay overtime.8U.S. Department of Labor. Fact Sheet 79B: Live-in Domestic Service Workers Under the Fair Labor Standards Act (FLSA)
The Filing Calendar
Household employment taxes run on an annual cycle tied to your personal tax return. For the 2026 tax year:
- January 31, 2027: give the employee Form W-2 and file Copy A of Forms W-2 and W-3 with the Social Security Administration.9Internal Revenue Service. General Instructions for Forms W-2 and W-3 (2026)
- April 15, 2027: file Schedule H with your Form 1040. If you don’t otherwise file a return, file Schedule H on its own by this date.3Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
You don’t have to deposit household employment taxes quarterly the way a business does. Cover them by increasing withholding at your own job or by making quarterly estimated payments with Form 1040-ES. The 2026 estimated payment deadlines are April 15, June 15, and September 15 of 2026, plus January 15, 2027 — a payment you can skip if you file your 2026 return and pay in full by February 1, 2027.10Internal Revenue Service. 2026 Form 1040-ES Estimated Tax for Individuals
Tax Breaks That Offset the Cost
Two tax benefits can bring down what you effectively pay for care. If your employer offers a Dependent Care FSA, you can set aside pre-tax dollars for qualifying care of children under 13 or dependents who cannot care for themselves. The 2026 limit is $7,500 per household, or $3,750 if married filing separately.11FSAFEDS. New 2026 Maximum Limit Updates Families who pay for care so they can work or look for work may also qualify for the Child and Dependent Care Tax Credit, claimed on Form 2441. You can’t use both benefits on the same dollars, but you can combine them across different expenses.
What Happens If You Skip It
The IRS failure-to-pay penalty is 0.5% of unpaid tax per month, up to 25%, with interest running on top and separate penalties for missing forms like Schedule H and Form W-2.12Internal Revenue Service. Failure to Pay Penalty Skipping state unemployment can leave your caregiver without benefits if the job ends, and if a caregiver is injured in your home without required workers’ comp coverage, you can be personally liable for medical bills and lost wages. Payroll services aimed at household employers (including HomePay, a Care.com subsidiary, along with GTM Payroll Services and SurePayroll) handle the calculations, deposits, and year-end forms for a monthly fee that typically starts around $70 for one employee.