Form 1040 Schedule H: Household Employment Taxes

Form 1040 Schedule H, Household Employment Taxes, is used to report and pay employment taxes for individuals who work in your home. Often called the “nanny tax,” it applies to a wide range of domestic workers. If you pay a household employee, you may need to account for Social Security, Medicare, and federal unemployment taxes. This schedule is filed with your personal income tax return to consolidate these tax obligations with your individual tax liability.

Who Must File Schedule H

You must file Schedule H if you meet certain wage thresholds for a household employee. A household employee is someone hired to do work in or around your home where you control what work is done and how it is done, such as a nanny, housekeeper, or gardener. This is different from an independent contractor, who controls their own work methods.

The filing requirement is triggered if you paid any single household employee cash wages of $2,800 or more in 2025. When this threshold is met, all cash wages paid to that employee are subject to Social Security and Medicare (FICA) taxes. FICA tax is composed of a 6.2% Social Security tax and a 1.45% Medicare tax for both you and the employee. Wages paid to a household employee under age 18 are exempt from FICA taxes, as long as household work is not their primary occupation.

A separate threshold applies to the Federal Unemployment Tax Act (FUTA). You must pay FUTA tax if you paid total cash wages of $1,000 or more to all household employees in any calendar quarter of 2024 or 2025. The FUTA tax is paid only by the employer.

You do not need to pay FICA or FUTA taxes on wages paid to your spouse or your child who is under age 21. Wages paid to a parent are also exempt from FICA taxes. However, you may need to pay FICA taxes if your parent cares for your child who is under 18 or has a condition requiring adult care, and you meet certain marital or spousal-disability status requirements.

You must also file Schedule H if you chose to withhold federal income tax from a household employee’s pay, even if you do not meet the FICA or FUTA wage thresholds. Withholding federal income tax is optional, but if you agree to an employee’s request to do so, it creates a filing obligation.

Information and Preparations for Filing

Before completing Schedule H, you must obtain a federal Employer Identification Number (EIN). An EIN is a unique nine-digit number from the IRS that identifies you as an employer for tax purposes. You cannot use your personal Social Security Number on this form.

You can apply for an EIN online through the IRS website for immediate issuance. You can also apply by mail or fax using Form SS-4, Application for Employer Identification Number. You will need to provide your name, address, and the month you first paid wages.

You will also need your employee’s full legal name and Social Security number. Maintain a complete record of all cash wages paid to each household employee for the year. If you paid state unemployment taxes, you will need records of those payments to calculate a credit against your federal unemployment tax.

How to Complete Form 1040 Schedule H

The form is divided into parts to guide you through the tax calculations. You will enter your name, Social Security number, and Employer Identification Number (EIN).

Part I is for calculating Social Security and Medicare taxes. You will enter the total cash wages paid to each employee who met the annual wage threshold and multiply the wages by the combined FICA tax rate. If you withheld federal income tax from your employee’s wages, you will report that amount in this section as well.

Part II addresses the Federal Unemployment (FUTA) tax. The tax is calculated on the first $7,000 of cash wages paid to each employee. You can claim a credit for any state unemployment taxes you paid, which can reduce the FUTA tax rate from a maximum of 6.0% to as low as 0.6%.

Part III combines the total Social Security and Medicare taxes, any federal income tax withheld, and the net FUTA tax. The result is your total household employment tax for the year.

Submitting the Form and Paying the Tax

The completed Schedule H must be attached to your annual federal income tax return, such as Form 1040, 1040-SR, or 1040-NR. The total household employment tax from Schedule H is added to your overall tax liability on your main tax form. If you are not required to file a personal income tax return, you must file Schedule H by itself.

Payment is made along with your regular income tax payment. To avoid a large balance due, you can manage this tax liability during the year by either increasing the federal income tax withholding from your own job via Form W-4 or making quarterly estimated tax payments using Form 1040-ES. Failing to pay enough tax throughout the year could result in an underpayment penalty.

As a household employer, you have other responsibilities. You must provide each household employee with Form W-2, Wage and Tax Statement, by January 31 of the following year. You are also required to file copies of all W-2s, along with Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by the same deadline.