it part, what you have to do depends on where the services are performed. also what you pay them must be reasonable - see item 3
1) you will have to provide documentation to the FSA provider to get them to release the funds. The FSA trustee can't release funds without due diligence that the expenses are legitimate. an bill even hand written showing names of provider, hours, rate total amount. Ask the FSA trustee. if they require anything else
2) you'll need their SSN and other info you already know such as name and address to fill out form 2441 to get the child and dependent care credit
3a) if they perform the services in their home they are independent contractors. nothing special needs to be done but they must report the income on their tax return since the IRS will match the info on your 2441 to their 1040 or
3b) if they perform other services in your home. then you will need to include with your 1040, besides the 2441, Schedule H. you'll need to issue a W-2 (to each if they both perform services) and file forms w-2/w-3 with the Social Security Adm. whether you have to pay and file state Unemployment compensation taxes is a matter of state law. you will need to get an employer identification number. federal withholding is not required unless requested. you may or may not have to pay medicare and social security taxes.
no social security or medicare taxes need to be paid on their wages if a) paid under $2400 in 2022 but they are required to be paid if both of the following conditions apply and paid over $2400:
a. Your parent cares for your child (including an adopted child or stepchild) who is either of the following.
i. Under the age of 18.
ii. Has a physical or mental condition that requires the personal care of an adult for at least 4 continuous weeks in the calendar quarter services were performed.
b. Your marital status is one of the following.
i. You’re divorced and haven't remarried.
ii. You’re a widow or widower.
iii. You’re living with a spouse whose physical or mental condition prevents him or her from caring for your child for at least 4 continuous weeks in the calendar quarter services were performed
see IRS PUB 926 if more info is required
https://www.irs.gov/pub/irs-pdf/p926.pdf
there are companies that for a fee will handle the filing requirements for the w-2/w-3 and even prepare schedule H and 2441 (the info would then need to be entered into TurboTax)
because any household employment taxes are part of your 1040 you may have to make estimated tax payments.
