What taxes do I owe if I hire a caregiver for my mom at home in New Jersey?

Luman Group · Published November 11, 2026

Is the caregiver your employee, or someone else's?

Before any tax question, answer this one. Who is the caregiver's employer? The answer decides who owes the taxes.

The IRS uses a simple test. If you can control not only what work is done, but how it is done, the worker is your household employee. It does not matter whether they work full time or part time, or whether you pay by the hour or by the week.

Three common setups in New Jersey:

• You hire the caregiver yourself. You set the schedule, you say what Mom needs and how, and you pay them. That person is almost always your employee. You are what the IRS calls a household employer.
• A home care agency sends the caregiver. If the agency provides the worker and controls the work, the IRS says the worker is not your employee. The agency handles payroll taxes. You pay the agency's bill.
• A public program pays the caregiver. Some state programs route pay through a payroll provider or a fiscal intermediary, a company the program uses to process caregiver pay and its tax filings. Ask the program who does what before the first payday.

Calling the caregiver a contractor and handing them a 1099 does not change the answer. The New Jersey Department of Labor says domestic workers who are misclassified as independent contractors, or paid in cash off the books, keep their rights as workers.

What federal taxes does a household employer owe in 2026?

The IRS rules are in Publication 926, the Household Employer's Tax Guide. The 2026 edition sets these lines:

• Social Security and Medicare. If you pay one household employee $3,000 or more in cash wages in 2026, both taxes apply. Together they are 15.3% of wages: 7.65% is your share, and 7.65% is withheld from the caregiver's pay.
• Federal unemployment tax (FUTA). If you pay total cash wages of $1,000 or more to household employees in any calendar quarter of 2025 or 2026, FUTA applies to the first $7,000 of each employee's wages. The rate is 6%, but you may get a credit of up to 5.4% for state unemployment contributions, so the usual net rate is 0.6%. You never take FUTA out of the caregiver's pay.
• Federal income tax. You do not have to withhold it. You can withhold it only if the caregiver asks, you agree, and they give you a completed Form W-4.

To do any of this you need an employer identification number (EIN) from the IRS. It is a nine-digit number, separate from your Social Security number.

Family members are treated differently

Wages you pay to your spouse, your child under 21, or your parent generally do not count for Social Security, Medicare or FUTA. The parent exception is narrow. It mostly covers a parent caring for your child under 18. If you pay your sister or your adult son to care for Mom, the usual rules apply.

What are New Jersey's household employer taxes for a caregiver?

New Jersey adds its own layer. The state's Division of Employer Accounts counts domestic service in a private home once you pay $1,000 or more in cash wages in any calendar quarter. From that point you register with the state as an employer and pay into its insurance funds.

What gets paid

The New Jersey Division of Taxation lists the contributions a domestic employer reports: unemployment insurance, the healthcare subsidy, workforce development, disability insurance and family leave insurance. Some come from you, and some are withheld from the caregiver's pay.

For 2026, the Department of Labor publishes these worker contribution rates, withheld from pay:

• Unemployment insurance: 0.3825%
• Workforce development and supplemental workforce funds: 0.0425%
• Temporary disability insurance: 0.19%
• Family leave insurance: 0.23%

Your own share as a new employer, for July 1, 2026 to June 30, 2027, is 2.6825% for unemployment and 0.50% for disability insurance. Both apply to the first $44,800 of each worker's 2026 wages. The rate notice the state sends you after you register shows your actual rate.

State income tax

The Division of Taxation ties this to the federal choice. If you withhold federal income tax for a household worker, you must also withhold New Jersey income tax.

The forms, once a year

If your only employees are household workers, New Jersey lets you file once a year instead of every quarter:

• Form NJ-927-H, the Domestic Employer's Annual Report, and Form WR-30 wage reports, filed electronically by January 31 for the year before.
• Form NJ-W-3, the annual reconciliation of tax withheld, by February 15.

When a due date falls on a weekend or holiday, it moves to the next business day. January 31, 2027 is a Sunday, so the 2026 reports are due Monday, February 1, 2027.

What could this cost? A worked example

Here is the arithmetic for one simple case, using only the 2026 rates above. It is an example, not a quote for your family.

Say you hire a caregiver directly for Mom in Long Branch, pay $500 a week, and keep them all year. That is $26,000 in cash wages.

What you pay on top of wages:

• Your Social Security and Medicare share, 7.65%: $1,989
• FUTA at the usual 0.6% on the first $7,000: $42
• New Jersey unemployment at the new employer rate, 2.6825%: $697.45
• New Jersey disability insurance at 0.50%: $130

That comes to about $2,858 for the year, before workers' compensation insurance.

What is withheld from the caregiver's pay and sent in by you:

• Their Social Security and Medicare share, 7.65%: $1,989
• Their New Jersey contributions, 0.845% in total: about $220

Two things people miss. First, you do not pay federal household taxes with a quarterly payroll form. You report them on Schedule H with your own 2026 tax return, due April 15, 2027. To avoid a large bill then, the IRS suggests paying during the year with extra withholding from your own paycheck or with estimated tax payments. Second, you give the caregiver a Form W-2 by February 1, 2027, and send Copy A with Form W-3 to the Social Security Administration by the same date.

What else comes with being a household employer in New Jersey?

Taxes are only part of it. Since July 1, 2024, the New Jersey Domestic Workers' Bill of Rights has covered people who care for an older adult in a private home. The state's employer page lists duties that include:

• A written agreement in the worker's preferred language, and in English, if they work more than five hours a month. It covers duties, pay, overtime, schedule, breaks and leave.
• At least New Jersey's minimum wage, and time and a half for hours over 40 in a week.
• Pay at least twice a month, no later than 10 days after the pay period ends.
• Earned sick leave of up to 40 hours a year, at 1 hour for every 30 worked. Our guide to New Jersey earned sick leave explains how accrual works.
• A paid 10-minute rest break every 4 hours, a 30-minute meal break after more than 5 hours in a row, and records of hours, pay, breaks and leave.
• Workers' compensation insurance, with written notice to the worker that you carry it.
• Notice before ending the job: 2 weeks for most workers and 4 weeks for live-in workers, with some exceptions, such as when the person you were caring for has died.

The state says the Bill of Rights does not cover family members (biological, in-law or step). Family members can still be covered by unemployment, disability and family leave insurance and workers' compensation, so the tax rules above may still apply.

The Department of Labor also notes that its rules for domestic workers were still going through formal rulemaking. Check the state's page before you sign an agreement.

How Luman Group helps New Jersey families hire a caregiver

Luman Group is an HR advisory firm based in Long Branch. It is not a home care agency, a payroll company or a tax preparer, and this post is general information, not tax or legal advice. For questions about your own return, talk to a tax professional. For questions about your mom's health or the care she needs, talk to her doctor.

What Luman Group does offer is the employer side, in plain English:

• The Family Caregiver Hire-in-a-Box, New Jersey edition, $199: the programs to ask about, hiring paperwork, payroll basics, scripts and checklists, with 12 months of free updates.
• Caregiver and Payroll Setup, $395 one time: a 60-minute kickoff, an onboarding and employer paperwork checklist, help organizing payroll provider setup or fiscal intermediary enrollment, and a walk through your first payroll.
• Caregiver Concierge, $149 a month: help preparing timesheets and payroll entries. You approve payroll, and your provider or fiscal intermediary processes payments. Luman Group never holds wages or tax funds.

Buying the kit does not promise eligibility, approval, funding or caregiver pay from any program. Luman Group serves families and small employers across New Jersey and in every other state.

Ready to set it up the right way?

If you are about to hire someone for your mom, a short conversation before the first payday saves a messy January. Call or text Meghan at (929) 459-7160, or send the form on the contact page, and she will tell you what you need.