What Is Schedule H for Household Employment Taxes?
Simplify your household employment tax obligations with our guide to IRS Schedule H. Ensure compliance and accurately report wages for your household staff.
When individuals hire someone to perform work in or around their home, such as a nanny, housekeeper, or gardener, they may become household employers with specific tax obligations. The Internal Revenue Service (IRS) provides Schedule H (Form 1040), titled “Household Employment Taxes,” for reporting and paying these federal taxes. Completing Schedule H is a necessary step for household employers to fulfill their tax responsibilities and avoid potential penalties.
Who Needs to File Schedule H
Individuals are generally required to file Schedule H if they pay cash wages above certain thresholds to household employees. For the 2024 tax year, if you paid any single household employee cash wages of $2,700 or more, you must report and pay Social Security and Medicare taxes. This threshold applies to all wages paid to that employee, including the initial $2,700. If you paid total cash wages of $1,000 or more in any calendar quarter of the current or previous year to all household employees, you must pay federal unemployment tax (FUTA).
A worker is considered a household employee if you control what work they perform and how it is carried out. This includes individuals like nannies, babysitters, housekeepers, or health aides. However, certain individuals are generally excluded from household employment taxes, such as your spouse, your child under age 21, your parent, or anyone under age 18. Schedule H is also required if you voluntarily withheld federal income tax from an employee’s wages, even if the wage thresholds for Social Security, Medicare, or FUTA taxes were not met.
Information Required for Schedule H
You will need your employee’s full name and Social Security Number. You will also need the total cash wages paid to each household employee during the tax year. If you withheld federal income tax from your employee’s wages at their request, you must have the total amount withheld.
Details regarding state unemployment taxes are also necessary for calculating the Federal Unemployment Tax Act (FUTA) credit. This includes the name of the state where you paid unemployment contributions and the amounts paid. Before filling out Schedule H, you must obtain an Employer Identification Number (EIN) from the IRS, as an EIN is required for all forms filed as a household employer, including an employee’s Form W-2. You can apply for an EIN online, by mail, or by fax using Form SS-4.
How to File Schedule H
The form is typically filed as an attachment to your personal income tax return, Form 1040. This means that the total household employment taxes calculated on Schedule H are integrated into your overall tax liability for the year. If you are not otherwise required to file a Form 1040, you can file Schedule H by itself.
Most taxpayers pay their household employment taxes by the annual tax filing deadline. You can make estimated tax payments using Form 1040-ES, or increase the federal income tax withholding from your own wages to cover the additional tax liability. If you utilize tax software for e-filing your personal income tax return, ensure the software supports the electronic submission of Schedule H. Records of wages paid, taxes withheld, and other relevant information should be kept for at least four years from the filing due date.