Maybe you didn't realize a regular nanny is a W-2 employee. Maybe you meant to set it up and never got to it. Either way, discovering you should have been paying nanny taxes — and haven't — is a common, fixable situation. Panicking doesn't help; a plan does. Here's how families get back on track.

This is general information, not legal or tax advice. Back-tax situations vary a lot — for anything beyond a straightforward catch-up, talk to a tax professional.

First, understand what's actually owed

If you crossed the wage thresholds, the taxes that went unpaid are the same ones you'd have handled all along:

  • FICA — both the employee share you should have withheld and your employer share (15.3% total).
  • FUTA/SUTA — federal and state unemployment tax you owed as the employer.
  • Income tax — if applicable, what should have been withheld (though ultimately your nanny's income tax is theirs to reconcile).
  • Penalties and interest — the cost of paying late, which grows the longer it waits.

The catch-up steps

  • Get an EIN if you don't have one — free, online, in minutes.
  • Reconstruct the wages you paid: pull bank/Zelle/Venmo records and total what your nanny earned in each affected year.
  • File the missing W-2(s) for your nanny for the prior year(s), with the matching W-3 to the SSA.
  • File (or amend) Schedule H for the affected year(s) with your personal return to report and pay the household employment taxes.
  • Register and file with your state for any missed SUTA and withholding.
Sooner is cheaper. Penalties and interest accrue over time, and voluntarily fixing a mistake is always viewed more favorably than waiting to be found.

Talk to your nanny

Getting compliant changes your nanny's records too — they'll now have reportable W-2 wages, which affects their own tax return. Have the conversation early. Frame the upside honestly: on-the-books pay builds their Social Security credits, unemployment eligibility, a verifiable work and income history, and access to childcare tax breaks for you.

Be careful not to quietly shift your share of the taxes onto your nanny. The employer portions (your half of FICA, plus FUTA/SUTA) are legally yours — retroactively docking them from your nanny's pay is both unfair and a problem of its own.

Then set it up so it never happens again

The reason most families fell behind is that doing it by hand felt like too much. Put a simple system in place — one that calculates withholding, issues pay stubs, sets aside taxes each quarter, and generates year-end forms — and staying compliant becomes the path of least resistance.

House reconstructs wages into clean records, generates prior-year W-2 figures and your Schedule H numbers, and keeps you current going forward — free.

Get back on track

The bottom line

Don't panic — catch up. Total the wages, file the missing W-2s and Schedule H, square up with your state, and talk it through with your nanny. Then put a system in place so compliance runs itself. The mistake is common; the fix is well-worn.