Your nanny gave two weeks' notice. Or maybe they left without any warning at all. Either way, the clock is ticking on a few things you need to handle.
Most of this is straightforward. The key is knowing the deadlines so nothing slips through the cracks.
Final Paycheck
This is the most time-sensitive piece. Every state has rules about when a departing employee must receive their last paycheck, and the deadlines are all over the map.
| Situation | States Requiring Immediate Pay | States Allowing Next Regular Payday |
|---|---|---|
| Employee quits | Most states: next regular payday | Same |
| Employee is terminated | California, Colorado, Montana, Oregon: same day or within 24–72 hours | Texas, Florida, Ohio, and most others: next regular payday |
What goes into that final check:
- All hours worked through the last day (including partial days)
- Any accrued, unused PTO or vacation time (if your state requires payout or your contract guarantees it)
- Overtime, if applicable
- The same tax withholdings as any other paycheck (Social Security, Medicare, federal and state income tax)
Run this through payroll the same way you'd run any other pay period. The taxes don't change just because it's the last one. Use our calculator to double-check the numbers if you want to verify.
If you've been tracking payments with NannyKeeper, run one final payroll and you're done with the calculation side.
Accrued PTO Payout
This catches a lot of families off guard. In some states, accrued vacation time is treated as earned wages, which means you're legally required to pay it out when employment ends.
| State | PTO Payout Required? |
|---|---|
| California | Yes — all accrued, unused vacation must be paid out |
| New York | Depends on employer policy (if your contract promises it, you must pay it) |
| Illinois | Yes — earned vacation must be paid |
| Massachusetts | Yes — vacation is considered wages |
| Colorado | Yes — vacation is earned compensation |
| Texas | Only if your contract or policy promises it |
| Florida | Only if your contract or policy promises it |
If you wrote a nanny contract that includes PTO terms, those terms govern. Read our PTO guide for the full state-by-state breakdown.
Tip: Sick leave is generally handled differently from vacation. Most state paid sick leave laws do not require payout at separation.
What About Taxes?
Employment ending mid-year does not end your tax responsibilities for the year.
Quarterly estimated payments
You owe federal (and usually state) estimated tax payments for every quarter in which you paid wages. If your nanny left in February, you still owe Q1 taxes by April 15.
The quarterly deadlines don't change:
| Quarter | Wages Paid During | Payment Due |
|---|---|---|
| Q1 | January – March | April 15 |
| Q2 | April – June | June 15 |
| Q3 | July – September | September 15 |
| Q4 | October – December | January 15 |
See our quarterly deadline guide for the full breakdown, or add the deadlines to your calendar.
W-2 by January 31
You must issue a W-2 to your nanny by January 31 of the year following employment, regardless of when they left. A nanny who worked January through March still gets a W-2 covering those three months of wages.
The W-2 reports total wages paid, Social Security and Medicare taxes withheld, federal and state income tax withheld, and your EIN. Our W-2 guide walks through every box.
Do not wait until tax season to figure this out. Gather your records while the numbers are fresh.
Schedule H at tax time
Schedule H goes on your personal Form 1040 and reports all household employment taxes for the year. You file it even if your nanny only worked part of the year.
If you're not hiring a replacement, this will be your last Schedule H. Include all wages and taxes from their period of employment.
State Separation Notifications
When a household employee leaves, some states require you to notify the state unemployment agency. This is separate from paying taxes.
If your nanny files for unemployment benefits, the state will look for your employment records. Better to have them on file already than to get a letter asking why you don't.
The notification requirements vary by state. Check your state's requirements or look for "employer separation notice" on your state labor department's website.
If your nanny was terminated (not a voluntary resignation), they may be eligible for unemployment benefits funded by the FUTA and SUTA taxes you've been paying. Our guide on what happens when your nanny files for unemployment covers the full process.
If You're Hiring a Replacement
The good news: your tax setup carries over. Same EIN, same state registrations, same quarterly schedule.
For the new hire, you'll need:
- A completed W-4 and I-9
- Their direct deposit info (if applicable)
- An updated nanny contract
Our first-time employer checklist covers onboarding, and most of it applies to second (or third) hires too.
FAQ
Do I owe unemployment tax if my nanny quits?
Yes. FUTA and SUTA are owed regardless of whether the nanny quit or was fired. These taxes are based on wages paid, not the reason for separation. However, if your nanny files for unemployment after quitting voluntarily, they generally won't qualify for benefits.
What about unused PTO?
It depends on your state and your contract. California, Illinois, Massachusetts, and Colorado require payout of accrued vacation. Other states defer to whatever your employment agreement says. Check our PTO guide for details.
When do I send the W-2?
By January 31 of the year after the wages were paid. If your nanny worked January through June 2026, you issue the W-2 by January 31, 2027. You do not need to send it immediately when they leave.
Do I need to notify anyone when my nanny leaves?
Some states require separation notices to the unemployment agency, especially if the employee was terminated. Check your state labor department's website. You do not need to notify the IRS separately.
What if my nanny left without notice?
The same rules apply. Calculate final pay through their last day worked, withhold taxes as usual, and issue the paycheck by your state's deadline. You still owe a W-2 in January and must file Schedule H at tax time. If they refuse to provide a forwarding address for the W-2, mail it to their last known address.
See what you'll owe
Use our free calculator to estimate your nanny tax costs for 2026.