There is plenty of information already for an elderly dad hiring a caregiver as a household employee in California such as this check list for California tax and labor laws. And this check list is for the Federal tax laws.

My question: which of those requirements are NOT needed if the caregiver is a family member, such as an adult child caring for his elderly dad?

For example, assuming the adult child is serving his dad out of love but needs to report a W2 income to cover his time cost (thus not prone to sue, or is a stickler about minimum wage / time off, etc.), does the dad need to:

  1. Provide California workers' compensation insurance?
  2. Pay for California SDI (State Disability Insurance)?
  3. Pay FICA (Social Security and Medicare tax) or FUTA (Federal Unemployment Tax Act)?
  4. Etc.

For this question, the scenario is that of a W2 employee (i.e. not independent contractor) who is paid more than the threshold in Schedule H ($2,700 for 2024).

For an example of relaxation of a rule, I have seen that employers do not need to pay Medicare and Social Security tax if the caregiver is a family member and is a minor, which doesn't apply if the caregiver is adult.

  • Why would dad hire them in the first place? They can just give the child the money as a gift, and it's tax-free.
    – Barmar
    Commented Mar 15 at 22:52
  • @Barmar The scenario my friend posed is that he needs to forego some work that could have made him eligible for Obamacare (that requires income above poverty level but also below a certain number). Commented Mar 17 at 13:54


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