Schedule H (Form 1040): Household Employment Taxes

Schedule H (Form 1040) is generally completed by reporting information about household employees, wages paid, applicable employment taxes, and any federal income tax withheld. The information should generally be based on the employer’s payroll records and other documentation related to household employment.

The schedule contains different parts for Social Security and Medicare taxes, federal income tax withholding, federal unemployment tax, and the total household employment tax liability. The sections that apply will depend on the employer’s circumstances and the type of wages paid.

Section 1: Employer and Employee Information

The beginning of Schedule H generally requires basic information about the household employer, including identifying information and an employer identification number when applicable.

Employers should make sure the information entered on the schedule is accurate and consistent with their employment records. Household employers should also maintain appropriate records for each household employee.

Section 2: Social Security and Medicare Taxes

This section is generally used to calculate Social Security and Medicare taxes that may apply to household employee wages. The calculation is generally based on qualifying wages paid to household employees.

Employers should keep accurate records of wages paid and any employee taxes that were withheld or paid by the employer. The applicable tax calculation depends on the employee’s wages and other circumstances.

Section 3: Federal Income Tax Withholding

Household employers may have federal income tax withholding responsibilities when applicable. If federal income tax was withheld from a household employee’s wages, the applicable amount is generally reported on Schedule H.

Federal income tax withholding is separate from Social Security and Medicare taxes. Employers should maintain records showing any federal income tax withheld and amounts reported to the employee.

Section 4: Federal Unemployment Tax

This section generally addresses federal unemployment tax that may apply to household employers. The tax is generally based on qualifying wages paid to household employees.

Whether federal unemployment tax applies depends on the employer’s circumstances and applicable requirements. Employers should maintain wage records and review the applicable rules when determining whether this tax applies.

Section 5: Total Household Employment Taxes

After the applicable employment taxes have been calculated, the amounts are generally combined to determine the household employer’s total employment tax liability.

The resulting amount is generally reported with the taxpayer’s federal income tax return when required. The calculation should be reviewed carefully before the schedule is submitted.

Section 6: Payments and Other Information

Schedule H may require information about payments or other amounts related to the household employer’s employment tax liability. Employers should compare these amounts with their payroll and payment records.

Accurate records can help ensure that the correct amount of household employment tax is reported. Employers should retain documentation supporting wages, withholding, tax calculations, and payments.

Section 7: Review and Filing

Before submitting Schedule H, the household employer should review all employee wages, withholding, employment taxes, payments, and identifying information for accuracy.

Schedule H is generally filed with the taxpayer’s applicable federal income tax return. In certain situations, Schedule H may be filed separately when the taxpayer is not otherwise required to file an income tax return.