Schedule H

Schedule H (Household Employment Taxes) is an IRS tax form used by taxpayers who employ household workers such as nannies, housekeepers, caregivers, gardeners, or other domestic employees. This schedule calculates and reports Social Security, Medicare, and federal unemployment (FUTA) taxes owed on wages paid to household employees, and is filed with your annual Form 1040.

You must file Schedule H if you pay any household employee cash wages of $2,700 or more in a calendar year (2024 threshold), or if you withhold federal income tax at the employee’s request, or if you pay total cash wages of $1,000 or more in any calendar quarter to all household employees. Household employees work in or around your private residence under your direction and control regarding what work is done and how it’s done. Common examples include babysitters, nannies, health aides, private nurses, maids, caretakers, yard workers, and housekeepers.

Schedule H requires you to report wages paid, calculate Social Security and Medicare taxes (15.3% combined, split equally between employer and employee portions), determine federal unemployment tax if applicable, and compute any federal income tax withheld. The employer’s share of these taxes is typically 7.65% for Social Security and Medicare, plus FUTA tax of 6% on the first $7,000 of each employee’s wages, though most employers receive a credit reducing FUTA to 0.6%.

Important exceptions exist: you don’t owe employment taxes for workers under age 18 (unless household work is their principal occupation), your spouse, your children under age 21, or your parent (with specific exceptions). Independent contractors, such as self-employed housecleaners who control their own work methods and provide their own tools, are not household employees and should receive Form 1099-NEC instead.

Filing Schedule H allows you to pay household employment taxes annually with your income tax return rather than making quarterly deposits. However, you may need to increase your income tax withholding or make estimated tax payments throughout the year to avoid underpayment penalties. You must also provide your household employees with Form W-2 by January 31st following the tax year, just as traditional employers do.