Both are employers and need their own tax id numbers. we use Homepay and it's easy and user friendly, but there are cheaper options such as TurboTax if you're willng to do a little more work yourself. But you should pay separately for tax reasons -- also makes it cleaner if one of you drops out of the share.

I don't really know the answer OP as I haven't ever done a share, but here's my guess.

Both families are employers in a share situation, so both families need to be paying taxes, having an employer ID number, etc... It doesn't seem likely (or even wise) that you could somehow skirt this under one account set-up.

Also, perhaps you have dependent care FSA plans you can use? If so, you'll need to be able to demonstrate that you paid for childcare.

Another family and I are about to start a nanny share. The other family already has an account with HomePay (formerly Breedlove). Does anyone know if we would also need to start an account or if we could simply provide checks to the other family and they use the service for the taxes and direct deposit for the nanny? It would be nice to save a little money and split the HomePay fee rather than have each family pay it. Please let me know if you have any information or advice about this matter. Thanks.