How to Give Your Nanny a W-2 (2026)

A family that hires a nanny becomes an employer without meaning to, and the paperwork that follows is the same W-2 a company issues, with a few household-specific rules layered on. The threshold is low, the tax is real, and the form the worker needs in January is not a 1099. This guide is the household version of the W-2 box-by-box guide: what makes you an employer, what the W-2 has to show, what changes if you cover the employee's share of tax, and where the numbers go on your own return.

Who counts as a household employee

Anyone you pay to do household work in or around your home whose work you control: nannies, au pairs paid directly, caregivers for a parent, housekeepers, cooks, private nurses, drivers, yard workers you employ directly. The IRS test is control, not the job title or the hours. If you decide what gets done and how, the worker is your employee even part-time, even if they also work for other families. An agency that employs the worker and bills you is the employer instead, and a self-employed cleaner who brings their own crew and equipment and sets their own methods is not your employee.

The contractor route is the mistake to avoid. Paying a nanny "as a 1099" saves the family the 7.65% employer share and hands the worker a 15.3% self-employment tax bill plus a form that does not match the work. The IRS treats it as misclassification, and a worker who files Form 8919 to have the wages treated as employment brings the family into it. The W-2 or 1099-NEC guide covers the general test; for in-home care it almost always lands on W-2.

The thresholds

Two of them, tested separately.

Social Security and Medicare. Once you pay $3,000 or more in cash wages to one household employee during 2026 (the figure was $2,800 for 2025), all of that employee's cash wages for the year are subject to Social Security tax at 6.2% and Medicare at 1.45%, from you and from the employee. Cash wages means pay in cash, check or transfer; the value of meals, lodging, transit passes and similar non-cash benefits is not counted and is not taxed. Wages you pay your spouse or your child under 21 are exempt regardless of amount. Wages you pay your parent are exempt too, unless your parent cares for your child who is under 18 (or who needs an adult's personal care for at least four continuous weeks in a quarter) and you are widowed, divorced and not remarried, or married to someone whose physical or mental condition keeps them from caring for the child for at least four continuous weeks in a quarter. Wages to an employee under 18 at any time in the year are also exempt unless household work is their main occupation, which rules out most students.

Federal unemployment tax. If you paid $1,000 or more in total cash wages to all household employees in any calendar quarter of 2025 or 2026, you owe FUTA on the first $7,000 paid to each employee in 2026. The rate is 6.0%, reduced to 0.6% by the credit for state unemployment tax paid on time, so about $42 per employee. Nearly every state also requires household employers to register and pay state unemployment insurance, in most states under the same $1,000-a-quarter test (New York and the District of Columbia use $500), and to report the new hire within a few weeks of the start date.

Federal income tax withholding is not required. The employee can ask for it by giving you a Form W-4, and many do, because a nanny with no withholding all year faces the full bill in April. If you agree, withhold using the same Publication 15-T tables any employer uses and put the total in box 2.

Set up before the first paycheck

Get an employer identification number, free from the IRS online in a few minutes; the W-2 and Schedule H both require one, and your Social Security number is not a substitute. Have the employee complete Form I-9 and keep it. Get a signed W-4 if they want withholding. Register with your state's unemployment agency and, where required, its new-hire reporting program and workers' compensation system. Then keep a record of every payment: date, gross, each tax withheld, net. A pay stub for each pay period is the simplest way to build that record and gives the nanny the income documentation a landlord or lender will ask for.

Filling in the household W-2

The form is the ordinary Form W-2. Boxes a through f carry the employee's SSN, your EIN, your name and home address, and the employee's name and address. Box d, the control number, stays blank. Then the wage boxes, which for a household employee usually all show the same figure.

Box 1, federal taxable wages: total cash wages for the year, plus any taxable non-cash pay, less any pre-tax amounts, which a household employer rarely has. Box 2, federal income tax withheld, if any. Boxes 3 and 5, Social Security and Medicare wages: cash wages for the year, the same figure as box 1 in the ordinary case. Box 4, 6.2% of box 3; box 6, 1.45% of box 5. Boxes 7 and 8 are blank; a nanny is not a tipped employee. Box 12 is usually empty unless you contributed to a retirement plan or an HSA for the employee. Box 13 has nothing to check. Boxes 15 through 17 show your state employer ID, state wages and any state income tax withheld, and 18 through 20 the local equivalents where a city or county levies its own.

The W-2 generator computes boxes 4 and 6 from the wage boxes and produces Copies B, C and 2 on plain paper in the substitute format Publication 1141 allows, with the Notice to Employee and box instructions on the back, for $4.99 or included with a subscription. Check the preview against your payment record before paying; a household W-2 with nothing exotic on it takes a few minutes.

If you paid the employee's share of tax

Many families do not withhold the nanny's 7.65% and instead pay both halves themselves, so the nanny takes home the agreed gross. Publication 926 allows it, with one consequence on the W-2. The employee's share you paid is additional income to them for income tax purposes but not for Social Security, Medicare or FUTA. So box 1 includes the cash wages plus the employee FICA you covered, while boxes 3 and 5 show cash wages only. A nanny paid $30,000 in cash whose $2,295 employee share you absorbed has $32,295 in box 1 and $30,000 in boxes 3 and 5, with $1,860 in box 4 and $435 in box 6 either way. It is the one common case where a household W-2's box 1 is larger than box 3, and it is the figure the IRS matches against Schedule H.

Schedule H and your own return

Household employers do not file Form 941 or make quarterly payroll deposits. The year's Social Security, Medicare and FUTA, plus any income tax you withheld, go on Schedule H, attached to your Form 1040 due April 15, 2027, and the total is added to your own tax. Schedule H asks for the wage totals and the tax on them, the FUTA calculation by state, and your EIN. Because the household tax lands on your return, it counts toward the underpayment penalty like any other tax; cover it during the year by raising the withholding on your own W-4 or by adding it to your estimated payments. If you also run a business with employees, you may fold the household wages into that business's Form 941 and Form 940 instead, in which case Schedule H is not filed.

The employee's W-2 wages should reconcile to Schedule H line for line. The IRS compares the W-2s filed under your EIN with the wages on the schedule, and a mismatch, usually from the box 1 gross-up above or from a year-end payment dated in the wrong year, generates a notice.

Deadlines

Copies B, C and 2 are due to the employee, and Copy A with Form W-3 to the Social Security Administration, by January 31, 2027, which falls on a Sunday, so Monday, February 1, 2027. Copy A is filed free through Business Services Online, which generates the W-3 for you; a single household W-2 typed into the site takes less time than ordering the red-ink paper form. Copy 1 goes to your state if it wants one, most do by the same date. Schedule H follows with your 1040 on April 15, 2027. The year-end calendar has the sequence with the rest of the employer forms.

Late or missing W-2s carry the same per-form penalties any employer faces, $60 to $340 per form depending on how late, charged once for the SSA copy and again for the employee copy. A family that misses the W-2 entirely usually finds out when the nanny's return is held up in March, which is worse for both sides than the penalty.

Records and the childcare credit

Keep copies of the W-2s, Schedule H, the W-4 and I-9, and the pay records for at least four years after the tax is due. If you claim the child and dependent care credit for the nanny's wages, Form 2441 needs the nanny's name, address and SSN, the same information the W-2 already carries, and the wages you claim there cannot exceed what you reported as paid.