Table of Contents
- Future Developments
- When and Where To File
- How To Fill In Schedule H, Form W-2, and Form W-3
- You Should Also Know
- Completed Examples of Schedule H, Form W-2, and Form W-3
- - Notices
Schedule H for figuring your household employment taxes.
Form W-2, Wage and Tax Statement, for reporting wages paid to your employees.
Form W-3, Transmittal of Wage and Tax Statements, for sending Copy A of Form(s) W-2 to the Social Security Administration (SSA).
For more information, see What Forms Must You File? in Pub. 926, Household Employer's Tax Guide.
|February 2, 2015||Give your employee Form W-2.|
|March 2, 2015 (March 31, 2015 if you file electronically)||Send Copy A of Form(s) W-2 with Form W-3 to the SSA. Visit www.socialsecurity.gov/employer for details.|
|April 15, 2015||File Schedule H and pay your household employment taxes with your 2014 tax return.|
For the latest information about developments related to Schedule H and its instructions, such as legislation enacted after they were published, go to www.irs.gov/scheduleh.
If you are required to file a 2014 Form W-2 for any household employee, you must also send Form W-3 with Copy A of Form(s) W-2 to the SSA. You are encouraged to file your Forms W-2 and W-3 electronically. Visit the SSA's Employer W-2 Filing Instructions & Information website at www.socialsecurity.gov/employer to learn about electronic filing.
You must file Schedule H if you answer “Yes” to any of the questions on lines A, B, or C of Schedule H.
You paid Betty Oak to babysit your child and do light housework 4 days a week in your home. Betty followed your specific instructions about household and child care duties. You provided the household equipment and supplies Betty needed to do her work. Betty is your household employee.
Household work is work done in or around your home. Some examples of workers who do household work are:
|Caretakers||Health aides||Private nurses|
|Cleaning people||Housekeepers||Yard workers|
If a worker is your employee, it does not matter whether the work is full or part-time or that you hired the worker through an agency or from a list provided by an agency or association. Also, it does not matter if the wages paid are for work done hourly, daily, weekly, or by the job.
If you are a home care service recipient receiving home care services through a program administered by a federal, State, or local government agency, and the person who provides your care is your household employee, you can ask the IRS to authorize an agent under section 3504 to report, file, and pay all federal employment taxes, including FUTA taxes, on your behalf. See Form 2678, Employer/Payer Appointment of Agent, for more information.
If a government agency or third party agent reports and pays the employment taxes on wages paid to your household employee on your behalf, you do not need to file Schedule H to report those taxes.
You made an agreement with Paul Brown to care for your lawn. Paul runs a lawn care business and offers his services to the general public. He hires his own helpers, instructs them how to do their jobs, and provides his own tools and supplies. Neither Paul nor his helpers are your employees.
For more information, see Pub. 926.
You must file Form W-2 for each household employee to whom you paid $1,900 or more of cash wages in 2014 that are subject to social security and Medicare taxes. To find out if the wages are subject to these taxes, see the instructions for Schedule H, lines 1, 3, and 5. Even if the wages are not subject to these taxes, if you withheld federal income tax from the wages of any household employee, you must file Form W-2 for that employee.
If you file one or more Forms W-2, you must also file Form W-3.
If you have household employees, you will need an EIN to file Schedule H. If you do not have an EIN, see Form SS-4, Application for Employer Identification Number. Do not use a social security number in place of an EIN. The Instructions for Form SS-4 explain how you can get an EIN immediately over the internet, in 4 business days by fax, or in about 4 weeks if you apply by mail. See How To Get Forms and Publications for details on how to get forms and publications including Form SS-4. To get an EIN over the internet, visit IRS.gov and enter “EIN” in the search box.
It is unlawful to employ a person who cannot legally work in the United States. When you hire a household employee to work for you on a regular basis, you and the employee must each complete part of the U.S. Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. You must verify that the employee is either a U.S. citizen or a person who can legally work in the United States and you must keep Form I-9 for your records. You can get the form and the USCIS Handbook for Employers by calling 1-800-870-3676, or by visiting the USCIS website at www.uscis.gov.
If you employed a household employee in 2014, you probably have to pay contributions to your state unemployment fund for 2014. To find out if you do, contact your state unemployment tax agency. For a list of state unemployment tax agencies, visit the U.S. Department of Labor's website at www.workforcesecurity.doleta.gov/unemploy/agencies.asp. You should also find out if you need to pay or collect other state employment taxes or carry workers' compensation insurance.
If you file Form 1040, 1040NR, 1040-SS, or 1041 for 2014, remember to attach Schedule H to it. Mail your return, by April 15, 2015, to the address shown in your tax return instructions.
If you are a calendar year taxpayer and have no household employees for 2014, you do not have to file Schedule H for 2014.
If you are not required to file a 2014 tax return (for example, because your income is below the amount that requires you to file), you must file Schedule H by itself by April 15, 2015. Complete Schedule H and put it in an envelope with your check or money order. Do not send cash. See the list of filing addresses in these instructions. Mail your completed Schedule H and payment to the address listed for the place where you live. Make your check or money order payable to the “United States Treasury” for the total household employment taxes due. Enter your name, address, social security number, daytime phone number, and “2014 Schedule H” on your check or money order. Household employers that are tax-exempt, such as churches, may also file Schedule H by itself.
By February 2, 2015, you must give Copies B, C, and 2 of Form W-2 to each employee. You will meet this requirement if the form is properly addressed, mailed, and postmarked no later than February 2, 2015.
By March 2, 2015 (March 31, 2015, if you file Forms W-2 and W-3 electronically), send Copy A of all Forms W-2 with Form W-3 to the SSA. Mail Copy A of all Forms W-2 with Form W-3 to:
Social Security Administration
Data Operations Center
Wilkes-Barre, PA 18769-0001
For certified mail, the ZIP code is 18769-0002. If you use a carrier other than the U.S. Postal Service, add “ATTN: W-2 Process, 1150 E. Mountain Dr.” to the address and change the ZIP code to “18702-7997.”
For more information on filing Forms W-2 and W-3 electronically, visit the SSA's Employer W-2 Filing Instructions & Information website at www.socialsecurity.gov/employer.
Check with your state, city, or local tax department to find out if you must file Copy 1 of Form W-2.
Your child who was under age 21.
Your parent. (See Exception for parents below.)
Your employee who was under age 18 at any time during 2014. If the employee was not a student, see Exception for employees under age 18 below.
Include the cash wages you paid your parent for work in or around your home if both 1 and 2 below apply.
Your child who lived with you was under age 18 or had a physical or mental condition that required the personal care of an adult for at least 4 continuous weeks during the calendar quarter in which services were performed. A calendar quarter is January through March, April through June, July through September, or October through December.
You were divorced and not remarried, a widow or widower, or married to and living with a person whose physical or mental condition prevented him or her from caring for the child during that 4-week period.
For 2014, you can generally give your employee transportation benefits such as $130 per month for combined commuter highway vehicle transportation and transit passes; $250 per month for qualified parking; or for a calendar year, $20 multiplied by the number of qualified bicycle commuting months during that year for qualified bicycle commuting reimbursement of expenses incurred during the year, without the benefits counting as cash. However, the value of benefits over the specified amounts a month is included as wages. See Transportation (Commuting) Benefits in Pub. 15-B, Employer's Tax Guide to Fringe Benefits, for more information.
Social security and Medicare taxes fund retirement, survivor, disability, and health benefits for workers and their families. You and your employees generally pay these taxes in equal amounts.
You are not required to withhold federal income tax from wages you pay a household employee. You should withhold federal income tax only if your household employee asks you to withhold it and you agree. The employee must give you a completed Form W-4, Employee's Withholding Allowance Certificate.
For 2014, the social security tax rate is 6.2% each for you and your employee. The Medicare tax rate is 1.45% each. The limit on wages subject to social security tax is $117,000. There is no limit on wages subject to the Medicare tax. If you did not deduct the employee's share from his or her wages, you must pay the employee's share and your share (a total of 12.4% for social security and 2.9% for Medicare tax) of tax. See Form W-2 and Form W-3 in these instructions for more information.
In addition to withholding Medicare tax at 1.45%, you must withhold a 0.9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Additional Medicare Tax is only imposed on the employee. There is no employer share of Additional Medicare Tax. All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold.
For more information on Additional Medicare Tax, visit IRS.gov and enter “Additional Medicare Tax” in the search box.
If you pay a household employee $1,900 or more in cash wages during 2014, you must report and pay social security and Medicare taxes on all the wages. The test applies to cash wages paid in 2014 regardless of when the wages were earned. See Pub. 926 for more information. Or, visit the SSA's website at www.socialsecurity.gov/pubs/10021.html.
|If you file
Form. . .
|Then enter the amount from Schedule H, line 8, on. . .|
|1040-SS||Part I, line 4|
|1041||Schedule G, line 6|
FUTA tax, with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a federal and state unemployment tax.
The FUTA tax rate is 6.0% (.060). But see Credit for contributions paid to state below. Do not deduct the FUTA tax from your employee's wages. You must pay it from your own funds.
Any payments deducted or deductible from your employees' pay;
Penalties, interest, or special administrative taxes; or
Voluntary contributions you paid to get a lower state experience rate. See the instructions for line 17 for more information.
Your child who was under age 21.
Enter the total contributions (defined earlier) you paid to the state unemployment fund for 2014 by April 15, 2015. Fiscal year filers, enter the total contributions you paid to the state unemployment fund for 2014 by the due date of your return (not including extensions). If you are claiming excess credits as payments of state unemployment contributions, attach a copy of the letter from your state.
State Names and Postal Abbreviations
|State||Postal Abbreviation||State||Postal Abbreviation|
|District of Columbia||DC||Ohio||OH|
|Missouri||MO||U.S. Virgin Islands||VI|
|1. Enter the smaller of the amount from Schedule H, line 19 or line 22||1|
|2. Enter the total taxable FUTA wages from Schedule H, line 20||2|
|3. Place an “X” in the box of EVERY state in which you had to pay state unemployment tax this year. If all of the states you check have a credit reduction rate of zero, do not enter an amount on line 23. For each state with a credit reduction rate greater than zero, enter the FUTA taxable wages, multiply by the reduction rate, and then enter the credit reduction amount. Do not include in the FUTA Taxable Wages box wages that were excluded from state unemployment tax. If any states do not apply to you, leave them blank.|
|Postal Abbreviation||FUTA Taxable Wages||Reduction Rate||Credit Reduction||Postal Abbreviation||FUTA Taxable Wages||Reduction Rate||Credit Reduction|
|AK||x .000||NC||x .012|
|AL||x .000||ND||x .000|
|AR||x .000||NE||x .000|
|AZ||x .000||NH||x .000|
|CA||x .012||NJ||x .000|
|CO||x .000||NM||x .000|
|CT||x .017||NV||x .000|
|DC||x .000||NY||x .012|
|DE||x .000||OH||x .012|
|FL||x .000||OK||x .000|
|GA||x .000||OR||x .000|
|HI||x .000||PA||x .000|
|IA||x .000||RI||x .000|
|ID||x .000||SC||x .000|
|IL||x .000||SD||x .000|
|IN||x .015||TN||x .000|
|KS||x .000||TX||x .000|
|KY||x .012||UT||x .000|
|LA||x .000||VA||x .000|
|MA||x .000||VT||x .000|
|MD||x .000||WA||x .000|
|ME||x .000||WI||x .000|
|MI||x .000||WV||x .000|
|MN||x .000||WY||x .000|
|MO||x .000||PR||x .000|
|MS||x .000||VI||x .012|
|4. Total Credit Reduction. Add all amounts shown in the Credit Reduction boxes. Enter the total here.||4|
|5. Subtract line 4 of this worksheet from line 1 of this worksheet and enter the result here and on Schedule H, line 23.||5|
|If you file
Form. . .
|Then do not complete Part IV but enter the amount from Schedule H, line 26, on . . .|
|1040-SS||Part I, line 4|
|1041||Schedule G, line 6|
If you file one or more Forms W-2, you must also file Form W-3.
You must report both cash and noncash wages in box 1, as well as tips and other compensation. The completed Forms W-2 and W-3 in the example (in these instructions) show how the entries are made. For detailed information on preparing these forms, see the General Instructions for Forms W-2 and W-3.
Enter the amounts you paid on your employee's behalf in boxes 4 and 6 (do not include your share of these taxes).
Add the amounts in boxes 3, 4, and 6. (However, if box 5 is greater than box 3, then add the amounts in boxes 4, 5, and 6.)
Enter the total in box 1.
You may need to increase the federal income tax withheld from your pay, pension, annuity, etc., or make estimated tax payments to avoid an estimated tax penalty based on your household employment taxes shown on Schedule H, line 26. You may increase your federal income tax withheld by giving your employer a new Form W-4, or by giving the payor of your pension a new Form W-4P, Withholding Certificate for Pension or Annuity Payments. Make estimated tax payments by filing Form 1040-ES, Estimated Tax for Individuals. For more information, see Pub. 505, Tax Withholding and Estimated Tax.
You will not have federal income tax withheld from wages, pensions, or any other payments you receive.
Your income taxes, excluding your household employment taxes, would not be enough to require payment of estimated taxes.
You must keep copies of Schedule H and related Forms W-2, W-3, and W-4 for at least 4 years after the due date for filing Schedule H or the date the taxes were paid, whichever is later. If you have to file Form W-2, also keep a record of each employee's name and social security number. Each payday, you should record and keep the dates and amounts of:
Cash and noncash wage payments,
Any employee social security tax withheld,
Any employee Medicare tax withheld, and
Any federal income tax withheld.
The EIC is a refundable tax credit for certain workers.
You are encouraged to notify each employee whose wages for 2014 were less than $46,997 ($52,427 if married filing jointly) that he or she may be eligible for the EIC for 2014.
The official IRS Form W-2, which has the required information about the EIC on the back of Copy B.
A substitute Form W-2 with the same EIC information on the back of the employee's copy that is on Copy B of the official IRS Form W-2.
Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC).
Your written statement with the same wording as Notice 797.
Do not use Schedule H if you chose to report employment taxes for your household employees along with your other employees on Form 941, Employer's QUARTERLY Federal Tax Return; Form 943, Employer's Annual Federal Tax Return for Agricultural Employees; or Form 944, Employer's ANNUAL Federal Tax Return. If you report this way, be sure to include your household employees' wages on your Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return.
Certain state disability plan payments to household employees are treated as wages subject to social security and Medicare taxes. If your employee received payments from a plan that withheld the employee's share of social security and Medicare taxes, include the payments on lines 1 and 3 of Schedule H and complete the rest of Part I through line 7. Add lines 2, 4, 6, and 7. From that total, subtract the amount of these taxes withheld by the state. Enter the result on line 8. Also, enter “disability” and the amount subtracted on the dotted line next to line 8. See the notice issued by the state for more details.
If you discover an error on a Schedule H that you previously filed with Form 1040, Form 1040NR, or Form 1040-SS, file Form 1040X, Amended U.S. Individual Income Tax Return, and attach a corrected Schedule H. If you discover an error on a Schedule H that you previously filed with Form 1041, file an “Amended” Form 1041 and attach a corrected Schedule H.
If you discover an error on a Schedule H that you filed as a stand-alone return, file another stand-alone Schedule H with the corrected information. In the top margin of your corrected Schedule H write (in red ink if possible) “CORRECTED” followed by the date you discovered the error.
If you owe tax, pay in full with your Form 1040X, Form 1041, or stand-alone Schedule H. If you overpaid tax on a previously filed Schedule H, then depending on whether you adjust or claim a refund, you must certify that you repaid or reimbursed the employee's share of social security and Medicare taxes, or that you have obtained consents from your employees to file a claim for refund for the employee tax. See Pub. 926 for complete instructions.
To get the IRS forms and publications mentioned in these instructions (including Notice 797), visit www.irs.gov/formspubs or call 1-800-TAX-FORM (1-800-829-3676).
On February 12, 2014, Susan Green hired Helen Maple to clean her house every Wednesday. Susan did not have a household employee in 2013 and had no household employees other than Helen during 2014.
Susan paid Helen $50 every Wednesday for her day's work. Susan decided not to withhold Helen's share of the social security and Medicare taxes from the wages she paid Helen. Instead, she will pay Helen's share of these taxes from her own funds. Susan did not withhold federal income tax because Helen did not give her a Form W-4 to request withholding and no withholding is otherwise required.
Helen was employed by Susan for the rest of the year (a total of 46 weeks). The following is some of the information Susan will need to complete Schedule H, Form W-2, and Form W-3.
|Helen's total cash wages||$2,300.00|
|($50 x 46 weeks)|
|Helen's share of the:|
|Social security tax||$142.60|
|($2,300 x 6.2% (.062))|
|($2,300 x 1.45% (.0145))|
|Helen's total cash wages each quarter:|
|1st quarter||$350.00 ($50 x 7 weeks)|
|2nd quarter||$650.00 ($50 x 13 weeks)|
|3rd quarter||$650.00 ($50 x 13 weeks)|
|4th quarter||$650.00 ($50 x 13 weeks)|
|Amount included in box 1 of Form W-2 and Form W-3:|
|Helen's share of social security tax paid by Susan||142.60|
|Helen's share of Medicare tax paid by Susan||33.35|
Because Susan paid less than $1,000 per quarter to household employees during 2013 (no employees) and 2014 (see above), she is not liable for FUTA tax.
Do You Have To File Form 1040, 1040NR, 1040-SS, or Form 1041?
Yes — Attach Schedule H to that form and mail to the address in your tax return instructions.
No — Mail your completed Schedule H and payment to the Department of the Treasury, Internal Revenue Service, for the place where you live. No street address is needed. See When and Where To File for the information to enter on your payment.
|IF you live in...||THEN use this address...|
|Florida, Louisiana, Mississippi, Texas||Austin, TX 73301-0002|
|Alaska, Arkansas, Arizona, California, Colorado, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Utah, Washington, Wisconsin, Wyoming||Fresno, CA 93888-0002|
|Alabama, Connecticut, Delaware, District of Columbia, Georgia, Kentucky, Maine, Maryland, Massachusetts, Missouri, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia||Kansas City, MO 64999-0002|
|APO, FPO, American Samoa, the Commonwealth of the Northern Mariana Islands, nonpermanent residents of Guam or the U.S. Virgin Islands*, Puerto Rico, dual-status aliens, a foreign country||Austin, TX 73301-0215|
* Permanent residents of Guam should use: Department of Revenue and Taxation, Government of Guam, P.O. Box 23607, GMF, GU 96921; permanent residents of the U.S. Virgin Islands should use: USVI Bureau of Internal Revenue, 6115 Estate Smith Bay, St. Thomas, VI 00802.
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