What Is Schedule H on a Tax Return?

Schedule H is a tax form used by individuals who employ household workers and are responsible for reporting and paying associated employment taxes to the Internal Revenue Service (IRS). This form helps calculate taxes such as Social Security, Medicare, and federal unemployment taxes that may be owed on wages paid to household employees. It integrates with an individual’s personal income tax return, Form 1040, to ensure proper reporting of these specific tax obligations.

Defining Household Employment and Tax Obligations

A worker is considered a household employee if the employer controls not only what work is done but also how and when it is done. This includes individuals performing services in or around a private residence, such as nannies, housekeepers, caregivers, and yard workers. This differentiates them from independent contractors, who control how their work is executed and offer services to the public.

Household employers may incur obligations for Social Security and Medicare taxes, collectively known as Federal Insurance Contributions Act (FICA) taxes. Both the employer and employee contribute to FICA taxes, each paying 7.65% of wages; this includes 6.2% for Social Security and 1.45% for Medicare. The Social Security portion of the tax applies to wages up to a certain annual limit, which is $176,100 for 2025, while there is no wage limit for the Medicare tax. Employers are required to withhold the employee’s share of FICA taxes from their wages.

An employer must pay FICA taxes if they pay cash wages of $2,800 or more in 2025 to any one household employee. Certain individuals are exempt from FICA taxes, including wages paid to a spouse, a child under the age of 21, a parent, or any employee under the age of 18 at any point during the year.

Federal Unemployment Tax Act (FUTA) taxes are another obligation for some household employers. FUTA is paid solely by the employer and is not withheld from the employee’s wages. The FUTA tax rate is 6.0% on the first $7,000 of cash wages paid to each household employee annually. However, employers can receive a credit of up to 5.4% for timely payments of state unemployment taxes, which can reduce the effective federal rate to 0.6%.

FUTA tax obligations arise if an employer pays total cash wages of $1,000 or more to household employees in any calendar quarter during the current or preceding year. An employer must withhold federal income tax if the employee requests it and the employer agrees. If income tax is withheld, the employee must provide a completed Form W-4, Employee’s Withholding Certificate.

Gathering Information for Schedule H

A central requirement is an Employer Identification Number (EIN), a nine-digit number assigned by the IRS for tax purposes, distinct from a Social Security number. An EIN is necessary for reporting employment taxes and can be obtained quickly online by submitting Form SS-4, Application for Employer Identification Number.

Employers need the full name and Social Security number of each household employee. The total cash wages paid to each employee during the tax year must also be compiled.

Any Social Security, Medicare, or federal income taxes withheld from employee wages throughout the year should be accounted for. If applicable, confirmation of state unemployment tax payments is also required, as these payments can impact the calculation of federal unemployment tax liability on Schedule H. Maintaining thorough records, such as pay stubs and wage summaries, is important for substantiating all reported figures.

Employers are also responsible for providing each household employee with a Form W-2, Wage and Tax Statement, by January 31 of the year following the tax year. If a W-2 is issued, a Form W-3, Transmittal of Wage and Tax Statements, must also be filed with the Social Security Administration.

Completing and Submitting Schedule H

Schedule H guides the employer in calculating the total Social Security, Medicare, and federal unemployment taxes owed based on the reported wages. This calculation also incorporates any federal income tax withheld from the employee’s pay.

Once the total household employment tax liability is determined on Schedule H, the calculated total from Schedule H is carried over to Schedule 2 (Additional Taxes) of Form 1040, and then added to the total tax liability on Form 1040.

Household employment taxes can be paid through several methods throughout the tax year. Employers can increase their federal income tax withholding from their own wages or other income sources to cover the additional tax liability. Another common method involves making estimated tax payments to the IRS using Form 1040-ES, Estimated Tax for Individuals, made in quarterly installments. Alternatively, the full amount of household employment taxes can be paid directly with the tax return by the April 15 filing deadline.

Schedule H is attached to the employer’s annual Form 1040 when filing. While electronic filing of Form 1040 with an attached Schedule H is possible, specific conditions related to state unemployment tax payments may sometimes necessitate paper filing. If an individual is not otherwise required to file a Form 1040, Schedule H can be filed by itself and mailed directly to the IRS.