Many families hire help under the table, viewing the cash payments to a cleaner, nanny, or senior caregiver as a private arrangement. However, the IRS has strict rules defining when “help” becomes “employment,” and in 2026, the threshold for reporting these payments is $3,000. Once you pay a single household worker more than this amount in a calendar year, you are legally an employer required to withhold taxes. Ignorance of this rule is not a defense, and with increased digital payment tracking (like Venmo and Zelle), the IRS has more visibility than ever into these informal wages. Failing to file Schedule H can lead to back taxes, penalties, and interest that far exceed the cost of doing it right.
