Paying an In-Home Caregiver for an Elderly Parent

Identify the actual employment arrangement

Paying for care for an elderly parent can involve a family member managing arrangements from somewhere else. Before choosing forms or preparing a stub, establish who employs the caregiver and who pays the wages. The fact that care takes place in a parent's home does not, by itself, explain the employment relationship or which person should appear as the employer.

The household employer rules discussed here apply when the caregiver is your employee, not simply because you receive an agency invoice. If an agency is involved, clarify the worker's employment status and the agency's responsibilities rather than assuming every arrangement is the same. Keep the agreement and ask a qualified professional if the employment relationship remains unclear.

Keep the care recipient and employee distinct

The family-member Social Security and Medicare exceptions concern the relationship to the employee. Paying an unrelated caregiver to care for your parent is not the same as paying your parent as the worker. If the caregiver is a relative, see Pub 926 for the exceptions. Do not claim an exception merely because the care recipient is a member of your family.

Review Social Security and Medicare

When 2026 cash wages to a household employee reach $3,000, Social Security and Medicare apply under the household employee threshold rule, subject to applicable exceptions. The employee rates are 6.2% and 1.45%, and the employer pays the same rates. The Social Security wage base is $184,500. Read IRS Publication 926 for household employment guidance.

Track the employee's actual wages across the year, including genuine cash payments. A change in which family member helps with paperwork is not a reason to lose the earlier payment history. Ask a tax professional how to handle shared family contributions or a change in employer rather than making the records fit an assumed exemption.

Check unemployment tax separately

FUTA applies if you pay $1,000 or more in cash wages to household employees in any calendar quarter. It is 6.0% of the first $7,000 per employee, minus a credit of up to 5.4% for state unemployment tax paid. This test differs from the annual Social Security and Medicare threshold. Keep payment dates available so the appropriate period can be reviewed.

Record the work and the payment

Keep the caregiver's name, employer details, work dates, agreed pay basis, hours where applicable and the actual earnings. Show genuine deductions separately from gross pay and record the net amount paid. Do not mix a family's general care expenses into the employee's wage record without understanding what each item represents. A clear stub explains employment pay, not every cost of caring for a parent.

Save payment evidence alongside the stub. A document explains the calculation but does not prove that funds were transferred or cash was received. If another family member handles the payment, coordinate the records so the employee receives a consistent explanation. Protect personal information and avoid sharing unnecessary care details in a wage statement.

Use a caregiver-specific template

The caregiver pay stub template shows how to present the employer, employee, period, earnings, deductions and net pay clearly. Use actual figures, not the sample amounts. The nanny tax calculator is a household employment estimate that can help review assumptions; its name does not limit household employment questions to nannies.

Prepare for annual reporting

Keep pay records consistent so wages and deductions can be reconciled for reporting. For 2026 wages, Form W-2 is due to the employee and Social Security Administration by February 1, 2027. Schedule H is filed with Form 1040, due April 15, 2027. Confirm what your arrangement requires with a tax professional and keep employment tax records for at least 4 years.