How Federal Tax Exemptions Work for Eligible Family Caregivers

When you employ a family member as your household caregiver, federal payroll taxes (FICA and FUTA) may apply a little differently than they would for a non-family employee. We've broken down who qualifies, how the rules differ by relationship, and what to expect on your payroll.

Who qualifies as a family caregiver?

The IRS recognizes the following relationships for federal family caregiver tax exemption purposes:

Your spouse
Your child under age 21
Your parent (with one narrow exception — see The parent-childcare exception)
A non-family minor under age 18 (for example, a teenage babysitter who isn't related to you)

Relationships that aren't eligible for exemption include siblings, cousins, aunts and uncles, nieces and nephews, in-laws, foster relationships, and any non-family adult.

How FICA and FUTA apply by relationship

FICA covers Social Security and Medicare. FUTA is the federal unemployment tax. To understand the rates that apply when these taxes do kick in, see FICA and FUTA tax rates explained.

Caregiver relationship	FICA (Social Security and Medicare)	FUTA (Federal Unemployment)
A minor under 18 who isn't your child	Exempt (until age 18)	Applies
Your child, currently under 21	Exempt (until age 21)	Exempt (until age 21)
Your spouse	Exempt	Exempt
Your parent	Usually exempt (see parent-childcare exception)	Exempt

When exemptions end and standard taxes begin

Federal exemptions are tied to age. When your caregiver passes one of the age thresholds, FICA and/or FUTA automatically begins applying to their wages going forward:

• A non-family minor turning 18 → FICA begins (FUTA already applies)

• Your child turning 21 → both FICA and FUTA begin

Poppins updates your payroll setup automatically based on the information in your account, and we'll email you before the change takes effect. Just keep your employee details up to date and we'll handle the rest.

A quick note on state taxes

Federal exemption doesn't always mean state exemption. Each state has its own family caregiver rules — sometimes stricter than federal (for example, a lower child age cutoff), sometimes broader. For the details that apply to you, see the family caregiver tax article for your state.

Disclaimer: This information is provided for general educational purposes and should not be considered tax, legal, financial, or human resources advice.