If you hire household help such as a nanny, caregiver, housekeeper, or gardener you may be required to file IRS Schedule H with your federal tax return. Schedule H ensures you properly report household employment taxes, including Social Security, Medicare, federal unemployment (FUTA), and any federal income tax you withhold. Because the rules can be confusing, many household employers aren’t sure when Schedule H applies or how to complete it. This guide breaks down everything you need to know in a clear, practical format.
What Is IRS Schedule H?
IRS Schedule H (Household Employment Taxes) is a tax form used by individuals who employ household workers and must pay employment taxes. Instead of filing separate payroll tax forms like a business, household employers can report all required taxes on Schedule H and attach it to Form 1040, 1040‑SR, or 1041.
A household employee is someone you hire to perform work in or around your home, and you control what work is done and how it is done. Common examples include:
- Nannies and babysitters
- Housekeepers and maids
- Senior caregivers
- Gardeners and yard workers
- Private cooks
- Personal assistants working in your home
Independent contractors such as plumbers, electricians, or landscaping companies do not count as household employees.
Who Must File Schedule H?
You must file Schedule H if you paid a household employee:
- $2,700 or more in cash wages in 2025 (Social Security and Medicare threshold),
- $1,000 or more in any calendar quarter (FUTA threshold), or
- Withheld federal income tax at the employee’s request.
These thresholds may change periodically, so it’s important to check the latest IRS updates.
Payments That Count as Wages
- Hourly pay
- Salary
- Cash bonuses
- Overtime
- Cash allowances (such as food or transportation)
Payments That Do NOT Count
- The value of meals or lodging
- Payments to your spouse
- Payments to your child under age 21
- Payments to your parent (with some exceptions)
Taxes Calculated on Schedule H
Schedule H helps you calculate and report three major types of household employment taxes:
1. Social Security and Medicare Taxes (FICA)
If you pay a household employee at least the annual threshold, you must withhold and pay:
- 6.2% Social Security tax (employer pays 6.2%, employee pays 6.2%)
- 1.45% Medicare tax (employer pays 1.45%, employee pays 1.45%)
You may choose to pay the employee’s share instead of withholding it.
2. Federal Unemployment Tax (FUTA)
You owe FUTA tax if you pay $1,000 or more in any quarter. The FUTA rate is:
- 6.0% on the first $7,000 of wages
- Most employers receive a 5.4% credit, reducing the effective rate to 0.6%
3. Federal Income Tax Withholding (Optional)
You are not required to withhold federal income tax unless the employee asks you to and you agree. If you do withhold, it must be reported on this schedule.
How to Complete Schedule H
Schedule H is divided into several sections. Here’s a simplified overview:
Part I: Social Security, Medicare, and Income Tax Withholding
You’ll calculate:
- Total cash wages
- Employee and employer FICA taxes
- Any federal income tax withheld
Part II: Federal Unemployment Tax (FUTA)
You’ll determine:
- FUTA wages
- FUTA tax before and after credits
- Total FUTA owed
Part III: Total Household Employment Taxes
This section adds everything together and determines the total tax you must pay.
Part IV: Additional Information
You’ll provide:
- Employer identification number (EIN)
- Employee details
- State unemployment contributions
When and How to File Schedule H
You must file this schedule with your individual tax return by the standard tax deadline typically April 15. If you file an extension using Form 4868, Schedule H is included with your extended return.
Payment Options
You can pay household employment taxes:
- As part of your annual tax bill, or
- Through quarterly estimated tax payments to avoid penalties
Penalties for Not Filing Schedule H
Failing to file or pay household employment taxes can lead to:
- IRS penalties and interest
- Back taxes owed for multiple years
- Loss of FUTA credit
- Problems with Social Security wage reporting for your employee
The IRS takes household employment compliance seriously, especially for nanny taxes.
Benefits of Filing Correctly
Filing Schedule H ensures:
- You stay compliant with federal tax law
- Your employee receives proper Social Security and Medicare credits
- You avoid costly penalties
- You maintain accurate payroll records
It also protects your employee’s future benefits, including disability and retirement.
Tips for Household Employers
- Get an EIN never use your Social Security number for payroll.
- Track hours and wages carefully.
- Use payroll software designed for household employers.
- Check state requirements, as many states require separate unemployment filings.
- Provide a Form W‑2 to your employee by January 31 each year.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.