Instructions For Schedule H (Form 1040) Household Employment Taxes

Important Dates!

Did you have a household employee?

If you hired someone to do

household work and you were able to control what work he or she

did and how he or she did it, you had a household employee. This is

true even if you gave the employee freedom of action. What matters

. . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . .

You must

is that you had the right to control the details of how the work was

January 31, 2011

Give your employee Form W-2.

done.

Example. You paid Betty Oak to babysit your child and do light

February 28, 2011

Send Copy A of Form W-2 with

housework 4 days a week in your home. Betty followed your

(March 31, 2011, if

Form W-3 to the Social Security

specific instructions about household and child care duties. You

you file

Administration. Visit

www.

provided the household equipment and supplies Betty needed to do

electronically)

socialsecurity.gov/employer

for

her work. Betty is your household employee.

details.

Household work is work done in or around your home. Some

April 18, 2011 (see

File Schedule H and pay your

examples of workers who do household work are:

page H-3 for

household employment taxes with

exceptions)

your 2010 tax return.

Babysitters

Drivers

Nannies

Caretakers

Health aides

Private nurses

Cleaning people

Housekeepers

Yard workers

If a worker is your employee, it does not matter whether the

The Basics

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.

What’s New

Note.

If a government agency or third party agent reports and pays

Credit reduction state.

A state that has not repaid money it bor-

the employment taxes on wages paid to your household employee

rowed from the federal government to pay unemployment benefits

under its employer identification number (EIN), you do not need to

is a “credit reduction state.” The Department of Labor determines

file Schedule H to report those taxes.

these states. If an employer pays wages that are subject to the

If you are a home care service recipient receiving home care

unemployment tax laws of a credit reduction state, that employer

services through a program administered by a federal, State, or local

must pay additional federal unemployment tax. For 2010, Indiana,

government agency, you can designate an agent under section 3504

Michigan, and South Carolina are credit reduction states. If you

to report, file, and pay all federal employment taxes, including

paid any wages in Indiana and South Carolina that are subject to the

FUTA taxes, on your behalf.

unemployment compensation laws of these states, you are not al-

lowed .003 of the regular .054 credit. If you paid any wages in

Workers you get from an

Workers who are not your employees.

Michigan that are subject to the unemployment compensation laws

agency are not your employees if the agency is responsible for who

of Michigan, you are not allowed .006 of the regular .054 credit. See

does the work and how it is done. Self-employed workers are also

the instructions for line 23 on page H-5 for more information.

not your employees. A worker is self-employed if only he or she

can control how the work is done. A self-employed worker usually

provides his or her own tools and offers services to the general

Reminders

public in an independent business.

Paid preparers are required to sign Schedule H.

Your paid

Example. You made an agreement with Paul Brown to care for

preparer must sign Schedule H in Part IV unless you are attaching

your lawn. Paul runs a lawn care business and offers his services to

Schedule H to Form 1040, 1040NR, 1040-SS, or Form 1041. A paid

the general public. He hires his own helpers, instructs them how to

preparer must sign Schedule H and provide the information re-

do their jobs, and provides his own tools and supplies. Neither Paul

quested in the Paid Preparer Use Only section if the preparer was

nor his helpers are your employees.

paid to prepare Schedule H and is not your employee. The preparer

must give you a copy of the return in addition to the copy to be filed

For more information, see Pub. 926.

with the IRS.

Who Needs To File Form W-2 and

If you must file a 2010 Form W-2, Wage and Tax Statement, for

any household employee, you must also send Form W-3, Transmit-

Form W-3?

tal of Wage and Tax Statement, with Copy A of Form(s) W-2 to the

You must file Form W-2 for each household employee to whom

Social Security Administration. You are encouraged to file your

you paid $1,700 or more of cash wages in 2010 that are subject to

Forms W-2 and W-3 electronically. Visit the Social Security web-

social security and Medicare taxes. To find out if the wages are

site at

to learn about electronic

subject to these taxes, see the instructions for Schedule H, lines 1

filing.

and 3, on page H-4. If the wages are not subject to these taxes but

you withheld federal income tax from the wages of any household

Who Needs To File Schedule H?

employee, you must file Form W-2 for that employee.

You must file Schedule H if you answer “Yes” to any of the

If you file one or more Forms W-2, you must also file

questions on lines A, B, or C of Schedule H.

Form W-3.

H-2

Instructions For Schedule H (Form 1040) Household Employment Taxes - 2010 Page 2

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