10/10/2026
Did you know?
Clients who are paid to take care of family members may have tax responsibilities. This depends on whether they are considered an employee or provide their services as their own business.
Caregivers who perform in-home services for elderly or disabled individuals are generally considered an employee and the person being cared for is considered the employer. This could make them responsible for employment taxes. Even if they don’t owe employment taxes, they’re still required to report the caregiver’s compensation on Form W-2.
When caregivers aren’t considered employees, they may still be required to report the compensation as income. They may also be required to pay self-employment tax depending on the facts and circumstances.
If the caregiver is engaged in a trade or business providing care services, they're required to pay self-employment tax.
See the recent IRS tax tip for additional rules and examples or call us we are here to help! Pro Financial Tax Services LLC
