Nannies, au pairs and babysitters
You now need paid help with your children, and two questions arrive at once: who pays for it, and what exactly are you signing up for. The first is a support question. The second is the one nobody warns you about — because if you hire someone to work in your home, you may be an employer, with tax filings, a W-2 and a set of labor obligations that arrive whether or not you knew about them.
These thresholds change annually. A number without a year attached is worse than no number, so each one below says which year it applies to and links to the IRS publication it came from. Check the current publication before you act on any of it.
The short version7 points · tap one to jump to it
- Who pays: childcare is almost never inside the base support figure
- Hiring someone is not like paying a babysitter, and the line is one sentence
- The credit that offsets it, and the rule divorced parents get wrong
- Au pairs: federal rules, and the one that defeats most single parents
- You are also a small employer under labor law — Federal regulations define domestic service employment to include “companions, babysitters, cooks, waiters, butlers, valets, maids, housekeepers” and the rest.
- Finding someone, and what you can actually check — Licensed childcare programs are a different world: federal law requires every state to ensure staff in licensed programs pass state and federal criminal background checks, including an FBI fingerprint check and a child abuse registry search.
- How this page was built — Where no government publishes a figure — the au pair stipend is the clearest case — we say so rather than repeating the number that circulates.
In this subject 8
Who pays: childcare is almost never inside the base support figure
The short version7 points · tap one to jump to it
- Who pays: childcare is almost never inside the base support figure
- Hiring someone is not like paying a babysitter, and the line is one sentence
- The credit that offsets it, and the rule divorced parents get wrong
- Au pairs: federal rules, and the one that defeats most single parents
- You are also a small employer under labor law — Federal regulations define domestic service employment to include “companions, babysitters, cooks, waiters, butlers, valets, maids, housekeepers” and the rest.
- Finding someone, and what you can actually check — Licensed childcare programs are a different world: federal law requires every state to ensure staff in licensed programs pass state and federal criminal background checks, including an FBI fingerprint check and a child abuse registry search.
- How this page was built — Where no government publishes a figure — the au pair stipend is the clearest case — we say so rather than repeating the number that circulates.
In this subject 8
Start with what federal law does not do. 45 CFR 302.56 is the federal condition every state’s child support guidelines must satisfy. It requires guidelines to address health care. It says nothing at all about childcare. So how childcare is handled is entirely a state choice, and states have made different ones.
What federal law does give you is a lever: the guideline figure is only a rebuttable presumption, and a judge departing from it must make a written finding explaining why. If your childcare costs are unusual, that is the mechanism.
- California makes it a mandatory add-on, on top of the base figure: “The court shall order the following as additional child support: (1) Childcare costs, if those expenses are actually incurred, related to employment or to reasonably necessary education or training for employment skills.” Note the phrase “actually incurred” — keep the receipts.
- New York ties it to what the custodial parent is doing: where that parent is working, or in education or vocational training the court finds will lead to employment, and incurs childcare as a result, the court shall determine reasonable childcare expenses and apportion them.
- Pennsylvania allocates reasonable childcare in proportion to net incomes — and does something else you need to know about, in the next callout.
- Massachusetts shares out-of-pocket childcare in proportion to income, but caps the shareable amount at $430 per week per child (2025 guidelines), after any discounts or subsidies.
Pennsylvania reduces the allocable childcare expense by the federal child care tax credit “regardless of whether the credit is actually claimed.”
Now read that against the tax section below, where only the custodial parent may claim that credit. A custodial parent in Pennsylvania who does not claim it loses twice: the support allocation is reduced as though they had, and they never got the money. If you are in Pennsylvania, claim the credit.
Hiring someone is not like paying a babysitter, and the line is one sentence
The IRS test is not about hours or titles:
“The worker is your employee if you can control not only what work is done, but how it is done. If the worker is your employee, it doesn’t matter whether the work is full time or part time or that you hired the worker through an agency.”
A nanny who works the hours you set, in your house, doing the job your way, is your employee. There are only three escapes: the worker alone controls how the work is done and is genuinely self-employed; the wages fall under the thresholds; or the person falls in an excluded category.
All four from IRS Publication 926 (2026), Household Employer’s Tax Guide
Three more details from Publication 926 that catch people out:
- Only cash counts toward the $3,000. Food, lodging, clothing and transit passes given in kind are not social security wages — but cash given instead of them is.
- You are not required to withhold federal income tax from a household employee, and many people assume the opposite. You withhold only if the employee asks and you agree.
- Owing nothing federally does not mean owing nothing. The IRS’s own note: “you don’t need to pay any federal employment taxes. But you may still need to pay state employment taxes.”
Wages you pay your own parent for household work normally do not count. But Publication 926 has an exception, and it applies when your parent cares for your child under 18 and you are divorced and have not remarried. In that case the wages do count.
Paying Grandma to watch the children can make you her employer. That is a strange thing to discover in April.
On babysitters: Publication 926 indexes them as household employees. Wages paid to someone under 18 are generally not counted — unless providing household services is that person’s principal occupation, and if they are a student it is not.
The credit that offsets it, and the rule divorced parents get wrong
The Child and Dependent Care Credit lets you count up to $3,000 of work-related care expenses for one qualifying person, or $6,000 for two or more, and take a credit of between 20% and 35% of that depending on income. You must have earned income, and you must name the care provider on your return.
Publication 503 says it in one sentence with no ambiguity:
“The noncustodial parent can’t treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents.”
This is where people go wrong. Form 8332 lets a custodial parent release the dependency claim — and its own “Purpose of Form” lists exactly what that release transfers: the exemption, the child tax credit, the additional child tax credit, and the credit for other dependents. The dependent care credit is not on that list. It stays with the custodial parent whatever the decree says.
So a non-custodial parent who actually pays the nanny gets no credit for it. If a settlement allocates childcare costs to that parent, the tax benefit does not follow the money — and that is worth pricing into the negotiation rather than discovering afterwards.
Custody here is counted in nights: the custodial parent is the one the child lived with for the greater number of nights in the year.
The dependent care FSA limit rose to $7,500 for tax year 2026 (from $5,000). But every dollar excluded through an FSA “isn’t included in your work-related expenses; and reduces the dollar limit” for the credit — and that limit is $6,000. Max the FSA and there is nothing left to claim the credit on. Which is better depends on your bracket; the point is that it is a choice, not two separate benefits.
IRS Publication 15-B (2026) · Publication 503, “Effect of exclusion on credit”
Au pairs: federal rules, and the one that defeats most single parents
An au pair is not a cheap nanny. It is a J-1 exchange visitor program with federal regulations attached, and the limits are not negotiable between you and the au pair.
“Place an au pair with a host family having children under the age of two, unless the au pair has at least 200 hours of documented infant child care experience.” And an EduCare au pair may not be placed with a family having pre-school children at home full time at all.
If you have a toddler, the pool of eligible au pairs is much smaller than the marketing suggests — and this is a sponsor obligation with real teeth: the State Department may begin immediate program revocation against a sponsor that fails to enforce the placement requirements.
Two more things worth knowing. Au pairs must be aged 18 to 26 and secondary school graduates, and they arrive already vetted: the regulation requires a background investigation covering school and three non-family references, “a criminal background check or its recognized equivalent and a personality profile.” That vetting is genuinely a point in the program’s favor, and it is done by someone other than you.
On money: no government source publishes a dollar stipend. The regulation requires compensation based on 45 hours in conformance with the FLSA; the State Department says only “pay a weekly minimum stipend based on the program option selected.” The specific figure that circulates is a derivation, not an official number, so we are not printing it. And the IRS position is that au pair wages are includible in the au pair’s gross income, as pay for domestic service in a private home.
Whether state wage laws reach au pairs has been contested. One state answers plainly: Massachusetts states that “Au pairs are domestic workers protected by the Massachusetts minimum wage, overtime, and Domestic Worker Bill of Rights laws.” That is that state’s position, not a national rule.
You are also a small employer under labor law
Federal regulations define domestic service employment to include “companions, babysitters, cooks, waiters, butlers, valets, maids, housekeepers” and the rest. The rule that matters most is the split between live-out and live-in:
- Live-out: minimum wage and overtime after 40 hours in a workweek.
- Live-in: the same minimum wage, but exempt from the federal overtime requirement. For a live-in worker, employer and employee may agree in writing to exclude sleeping time, meal time and genuinely free periods from hours worked — which is precisely why that written agreement should exist before anyone moves in.
- Casual babysitting is excluded from federal minimum wage and overtime — but “casual” is defined tightly: “employment which is irregular or intermittent, and which is not performed by an individual whose vocation is babysitting.” A regular weekday-afternoon sitter is not casual.
Several states add obligations on top. California’s Domestic Worker Bill of Rights gives personal attendants overtime after nine hours in a day or 45 in a week. New York publishes the clearest checklist of what a household employer must do — minimum wage, overtime after 40 hours (44 for live-in workers), and more. Massachusetts adds a duty the others do not: a written agreement before the work begins.
Cal. Lab. Code § 1454 · NY DOL, Facts for Employers of Domestic Workers
Finding someone, and what you can actually check
New York’s labor department, on hiring directly rather than through an agency: “If you hire someone yourself, you will not have access to a criminal history on that person.”
That is the trade-off, stated by a government rather than by an agency selling you something. Licensed childcare programs are a different world: federal law requires every state to ensure staff in licensed programs pass state and federal criminal background checks, including an FBI fingerprint check and a child abuse registry search. Hiring privately, none of that happens unless you make it happen.
Some states give you a route. Pennsylvania lets an individual apply for their own Child Abuse History Certification online and give it to you — so you can ask a candidate to obtain one. Check whether your state has an equivalent before you rely on a conversation and a reference.
NY DOL · childcare.gov · PA Child Abuse History Certification
One legal duty that is not optional: it is unlawful to knowingly employ someone who cannot legally work in the United States, and a household employer hiring on a regular basis must complete Form I-9 with the employee.
How this page was built
From IRS Publications 926, 503 and 15-B and Form 8332; the Code of Federal Regulations via eCFR; the Department of State’s own au pair program pages; the Department of Labor’s regulations on domestic service; four states’ child support guidelines; and three states’ own domestic-worker guidance. No nanny agency’s blog, no payroll company’s content marketing, no parenting site.
Where no government publishes a figure — the au pair stipend is the clearest case — we say so rather than repeating the number that circulates.
Thresholds change every year. If one of these is out of date, tell us — it goes on the corrections page with the date.
Keep reading
- Child support — how the base figure is calculated in your state
- Going back to work — and the funded training almost nobody knows about
- Getting your finances in order
- Splitting the holidays — the schedule the childcare has to fit around