Set Up a Paid Family Caregiver Arrangement Legally
Choose an appropriate funding and employment arrangement, document duties and pay, satisfy payroll or program requirements, and start auditable payments.
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Who it's for
Families in the United States who want to pay an adult relative — a parent, adult child, sibling, or other family member — for recurring care of an elder or a person with a disability, and who want the payments legal, documented, and auditable. It fits two-person-plus setups where one family member provides the care and another manages the money or paperwork.
About this playbook
This guide turns an informal family care arrangement into a legal, paid one: you assess the care recipient's real needs and available funding, choose the route that fits — private household employment, a state self-directed program, or an agency — and then register, paper, and pay in a way that satisfies IRS, state, and program rules. You will end with a signed agreement, working payroll or program payments, and a records and filing calendar you can maintain for years. It covers the employment and tax mechanics of paying a relative: EIN and state registration, workers' compensation checks, Forms W-4 and I-9, Social Security and Medicare withholdings, quarterly and annual filings, and the W-2. It does not cover applying for Medicaid eligibility itself, filing long-term care insurance claims, estate planning, special needs trusts, or caregiver training. A few steps are marked optional for readers whose state program handles the employment entirely.
What you'll do, step by stepFree preview
Only a sample is open: 4 of 23 steps can be read in full. The rest unlock when you buy.
Phase 1: Assess the care needs and available funding
5 stepsPhase 2: Choose the funding and employment arrangement
4 stepsPhase 3: Register and paper the arrangement
5 stepsPhase 4: Set up payroll and make the first payment
5 stepsPhase 5: Verify, file, and maintain the arrangement
4 steps
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What you need first
The care recipient lives in the United States, the caregiver is an adult eligible to work in the US, and there is a genuine, documented need for recurring care. Someone who can make decisions for the care recipient must exist or be obtainable (a power of attorney or guardianship). You need the care recipient's and caregiver's basic personal information and the payer's banking details. This guide is not for one-time or informal help, and it is not a substitute for legal advice.
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