Can I pay my nanny as a 1099 contractor?
Reviewed September 2026 against the same data that powers Kindred's free calculators.
Almost never. The IRS looks at who controls the work, and a family that sets the schedule, the duties, and the way care happens is an employer. That makes your nanny a W-2 household employee, not a 1099 contractor. Misclassifying shifts your payroll tax onto your nanny, and if it is caught you owe the back taxes plus penalties.
Why the 1099 shortcut backfires
- You still owe the employment taxes, now with penalties and interest on top
- Your nanny pays both halves of Social Security and Medicare (15.3%) instead of half, a real pay cut she will eventually notice
- No unemployment coverage for her if the job ends, which is when misclassification usually gets reported
- You lose the clean paper trail that childcare tax credits require
Doing W-2 right is lighter than it sounds
You need an EIN, quarterly-ish state filings, a January W-2, and Schedule H with your own return. Payroll services automate all of it for a modest monthly fee, or a spreadsheet and the calculator below get a DIY family most of the way.
Related
This page is a plain-English summary for planning, not tax or legal advice. Rates and thresholds change; confirm current figures with the IRS, your state agency, or a payroll professional before filing.