What Household Employers Need to Know About Schedule H
Schedule H, Household Employment Taxes, is a form that household employers use to report household employment taxes to the IRS.
As a new household employer, you’ll want to be well-versed on this tax form as you prepare for tax season. Below we provide a recap on who is considered a household employee, along with the top three things to know about Schedule H.
Who is Considered a Household Employee?
There are many types of household employees. Nannies are usually the most common type of household employee but others include:
- Private teachers or tutors
- Caregivers or Private nurses
- Landscapers or Gardners
- Personal assistants
- Personal chef
For nannies or babysitters, there are some exceptions. Your nanny or babysitter is not considered a household employee if they are:
- Your parent
- Your spouse
- Your child under the age of 21
- Anyone under the age of 18
The Nanny Tax and Schedule H
If you employe any of the workers above and pay them $2,200 or more in wages during the calendar year, you are subject to payroll taxes. With household employees, this tax is commonly called “the nanny tax.” These payroll taxes mean you are required to contribute to Social Security and Medicare taxes. Your household employee is also responsible for contributing to these taxes. As a household employer, you will withhold those tax amounts from each paycheck, and additionally, contribute 6.2% for Social Security taxes and 1.45% for Medicare tax. If your employee's wages are greater than $1,000 in a quarter, you are also responsible for FUTA taxes.
All of this information means you are responsible for submitting Schedule H during tax season.
What You Need to File Schedule H
When filling out Schedule H make sure to include the following:
- Your name, SSN, and Employer Identification Number (EIN)
- Wages paid to your household employee(s)
- Social Security and Medicare taxes withheld
- FUTA tax liability
- Income tax deducted from the employee’s wages (if applicable)
- Your signature
- The date
If you file an individual tax return with the IRS each year, you can attach Schedule H to Form 1040. If you don’t, you can file Schedule H on its own. Due to this process, Schedule H is typically going to be due by the tax filing deadline of April 15th. If it’s your first tax season as a household employer, make sure to give yourself plenty of time to get the important information together and file.
Important Note on Schedule H
It’s best practice to hang onto important tax documents. A proper organization system can make it easier to file taxes, serve as a safe place for receipts for tax deductions, and help the event there is a problem with your taxes. When it comes to Schedule H, you should keep copies for at least four years. You’ll want to have a record of each payday, wages, and the taxes withheld.
Navigating household payroll and taxes can be overwhelming when you first begin. The good news with Schedule H is that it’s relatively easy to navigate and the fact you can follow the same timeline as personal income taxes is helpful. Should you ever need more help, an online payroll service can help. Before choosing a nanny payroll service, there are five questions you should ask to make sure they are equipped to help you.
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This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.