Deciding to bring paid help into a parent's home is a turning point, and it usually comes with a knot of questions about who to trust and what it costs. The biggest ones: agency or hire someone directly, and how to vet a caregiver. This guide answers those questions plainly, including the tax rule that catches families completely off guard when they hire a caregiver on their own.

We'll cover the difference between home care and home health care, the two ways to hire, what to check before you do, and the household-employer taxes you need to know about.

Home Care and Home Health Care Are Not the Same

It helps to know which kind of help you actually need. Home care, also called personal care, sends an aide to help with everyday activities like bathing, dressing, grooming, toileting, eating, and moving around, and often light housekeeping, transportation, and errands. Home health care is different: per the National Institute on Aging, it is part-time, physician-ordered skilled care, such as in-home nursing or physical, occupational, or speech therapy, delivered by a medical professional. This guide is mostly about home care, the day-to-day help most families hire.

Two Ways to Hire: Agency or Independent

There are two main ways to bring paid help into the home, and the choice shapes everything from cost to who handles the paperwork.

  • Through a home care agency. The agency screens, hires, schedules, and pays its aides, and can typically send a substitute if your regular aide is unavailable. It costs more per hour, but the agency carries the burden of vetting, coverage, payroll, taxes, and insurance.
  • Hiring an independent caregiver directly. This often costs less per hour, but it shifts screening, scheduling, backup coverage, payroll, and taxes onto the family.

Neither is automatically right. A family with time to manage logistics and a trusted candidate may do well hiring directly; a family that's stretched thin, or far away, often finds an agency's reliability worth the premium.

What to Check Before You Hire

Whichever route you choose, do not skip the vetting. NIA recommends that families:

  • Check references and confirm the aide's relevant experience and training.
  • Check for complaints filed against a company with the state and local agencies that regulate health services, and with the Better Business Bureau.
  • Get the full picture before signing, including the services, fees, terms, and any restrictions.
  • Put the tasks in writing, agreeing on what the aide will and won't do, and then supervise and check in on the care.

A clear written understanding up front prevents most of the conflicts that otherwise surface a month in.

Not sure whether an agency or a direct hire fits your family, or how to vet a caregiver? Ask Brevy and we'll help you think it through.

The Tax Part Nobody Mentions: The Household Employer Rules

Here is the piece that surprises almost everyone. If you hire a caregiver directly (not through an agency), you may become a household employer in the eyes of the IRS, with real tax responsibilities, sometimes called the "nanny tax."

Per IRS Publication 926 (for use in 2026):

  • If you pay any one household employee cash wages of $3,000 or more in 2026, you must withhold and pay Social Security and Medicare (FICA) taxes.
  • If you pay total cash wages of $1,000 or more in any calendar quarter of 2025 or 2026, you also owe federal unemployment (FUTA) tax.
  • A household employer must get an Employer Identification Number (EIN) and provide the employee a Form W-2.

When you hire through an agency, the agency is typically the employer and handles these payroll taxes and insurance, which is a real part of what the higher hourly rate buys you. Note too that states can add their own obligations, such as state unemployment insurance, workers' compensation, or domestic-worker wage laws, on top of the federal rules, so check your state's requirements or talk to a tax professional.

How to Find Help

  • Call the Eldercare Locator at 1-800-677-1116, or visit eldercare.acl.gov, to reach your parent's Area Agency on Aging, which can point you to home care resources locally.
  • Ask the doctor or a hospital discharge planner for agency recommendations, especially after a hospitalization.
  • If your parent has Medicaid or is a veteran, ask whether in-home care is a covered benefit before paying privately. See our guides on respite care and VA benefits for veterans with dementia.

Free Resources Worth Saving

  • Eldercare Locator, 1-800-677-1116, connects you to your local Area Agency on Aging for home care resources
  • IRS Publication 926, Household Employer's Tax Guide, irs.gov/publications/p926, the official rules on household-employee taxes
  • National Institute on Aging, caregiving resources, nia.nih.gov, clinically vetted guidance

FAQ

Hiring an independent caregiver directly usually costs less per hour, but it shifts screening, scheduling, backup coverage, payroll, and taxes onto your family. A home care agency costs more per hour but screens, schedules, and pays its aides, sends a substitute when needed, and handles payroll taxes and insurance. The lower hourly rate of a direct hire can be partly offset by the time and tax responsibilities you take on.

Possibly. If you hire a caregiver directly and pay one household employee cash wages of $3,000 or more in 2026, you must pay Social Security and Medicare taxes, and if you pay $1,000 or more in any calendar quarter you also owe federal unemployment tax. You would need an EIN and would provide a W-2. When you hire through an agency, the agency is usually the employer and handles this.

Check references and relevant experience and training, check for complaints filed against an agency with state and local regulators and the Better Business Bureau, get the full services, fees, terms, and restrictions before signing anything, and put in writing which tasks the aide will and won't do. Then supervise and check in on the care.

Home care, or personal care, is help with daily activities like bathing, dressing, meals, and errands. Home health care is part-time, physician-ordered skilled care, such as in-home nursing or physical, occupational, or speech therapy, delivered by a medical professional.

Learn More

Bringing help into the home is a big step, and you don't have to sort it out alone. If you want help comparing agencies and direct hires, or understanding what's covered for your family, start with Brevy. We'll stay with you for as long as it takes.

Find personalized help arranging in-home care at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.

BC

Brevy Care Team

Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.