EIN for a Household Employer: Nanny, Caregiver, Housekeeper

Who is a household employee

The test is control, not job title. If you decide the hours, the duties, and how the work is done, and the work happens in or around your private home, the worker is your household employee. That covers nannies, au pairs, caregivers and home health aides you hire directly, housekeepers, cooks, drivers, and yard workers. It does not matter whether the work is full time or part time, or whether you found them through an agency, as long as you are the one paying and directing them.

Two common cases are not household employment. A worker supplied and paid by an agency that controls the work is the agency’s employee. And a self-employed provider who runs their own business, brings their own tools, sets their own methods, and serves other clients, such as a daycare operator in their own home or a landscaping company, is an independent contractor. You do not withhold for a contractor, and you do not need an EIN to pay one.

Why you cannot just use your SSN

Every employer-side form asks for an employer identification number. Form W-2 and its transmittal W-3 have an EIN box, Schedule H asks for it on the first line, and your state’s unemployment insurance registration will not complete without one. The IRS will not accept an SSN in those boxes. There is also a practical reason: the W-2 you hand your nanny shows your employer number, and you would rather that be an EIN than your Social Security number.

If you already have an EIN as a sole proprietor, Publication 926 says to use that number for your household employee too; you do not need a second one. An EIN that belongs to your LLC or corporation does not work, because the household employer is you personally, not the company.

What the SS-4 looks like for a household employer

You are applying as an individual, so the form is short, but three lines trip people up because the labels assume a business.

• Line 1. Your own legal name, exactly as on your Social Security card. Not “The Smith Household” and not the nanny’s name.
• Lines 4 to 6. Your home address and county.
• Lines 7a and 7b. You again, with your SSN. You are the responsible party.
• Line 9a. Check “Other” and write “Household employer” with your SSN. The IRS instructions call this out by name; it is not the sole proprietor box.
• Line 10. “Hired employees”.
• Line 13. The number of people you expect to employ in the next twelve months, in the household column. There are three columns on this line, and a nanny counted in the “other” column is the most common household-employer mistake on a filed SS-4.
• Line 15. The date you first paid, or will first pay, wages. The IRS uses it to decide which year’s Schedule H it expects.
• Line 16. “Other”, with “Household employer” as the activity.

Line 14, the Form 944 election, does not change anything for a pure household employer. Household wages are reported on Schedule H with your personal return, not on Form 941 or 944, unless you also run a sole proprietorship with employees and choose to fold the household wages in with them. Every line of the SS-4, explained.

What happens after the EIN arrives

The EIN is the first item on a short list, and the rest of the list is due whether or not you ever get around to it.

• Form I-9. You and the employee complete it within the first days of work. You keep it; nothing is filed.
• State registration. Register as an employer with your state’s unemployment insurance agency and, in most states, report the new hire to the state new-hire registry. Both ask for the EIN. State thresholds are often lower than the federal one, so you can owe state unemployment tax before you owe federal Social Security and Medicare. What your state requires once you have the EIN.
• Withholding through the year. Withhold the employee’s share of Social Security and Medicare from each paycheck, or pay it yourself and treat it as extra wages. Federal income tax withholding is optional for household employees and only happens if the employee asks and gives you a W-4.
• Form W-2 by January 31. To the employee, with a copy to the Social Security Administration.
• Schedule H with your Form 1040. This is where the employer share, the withheld employee share, and federal unemployment tax are computed and paid. Many household employers make estimated payments or raise their own withholding during the year so the April bill is not a surprise.

Quick answers

I pay a babysitter a few times a month. Do I need an EIN?

Only if their cash wages for the year pass the Publication 926 threshold. Below it, there is nothing to report and nothing to withhold. One exception to keep in mind: wages paid to a student under 18 whose main occupation is school are exempt from Social Security and Medicare regardless of amount.

Two families share a nanny. Whose EIN?

Each family is a separate employer of the same person. Each gets its own EIN, pays its own share, and issues its own W-2 for the wages it paid.

I use a nanny payroll service. Do I still need my own EIN?

Yes. The service files under your EIN as your agent; it does not replace it. Most services will ask for the number before they can set you up, and some will apply for it on your behalf.

Can I use my business EIN?

If the business is a sole proprietorship, yes, it is the same taxpayer. If it is an LLC or corporation, no. Household employment is personal, and the company’s number cannot report it. How a sole proprietor’s EIN works.

Do I need workers’ compensation insurance?

That is a state question and the answer varies widely. Several states require it for any household employee past a small number of hours; others exempt domestic workers entirely. Check with your state’s labor department when you register for unemployment insurance.

The caregiver is for my parent, but I pay. Who is the employer?

Whoever controls the work and pays the wages. If that is you, you are the employer and the EIN is in your name, even though the care is for someone else. If your parent’s funds pay and your parent directs the care, the EIN is in their name.