Instructions For Schedule H (Form 1040) Household Employment Taxes

Line 26.

Add the amounts on lines 16 and 25. If you were required

You Should Also Know

to complete Section B of Part II, add the amounts on lines 24 and 25

and enter the total on line 26.

What’s New for 2011

Follow the instructions in the chart below.

Line 27.

Changes to tax rates and wage threshold.

The tax rates mentioned

Then do not complete Part IV but

in the instructions for Part I and Part II of Schedule H will not

If you file

enter the amount from Schedule

change. Also, the cash wage threshold that you pay to any one

Form. . .

H, line 26, on . . .

household employee remains at $1,700 for 2011. The 2011 Em-

ployee Social Security and Medicare Tax Withholding Table is in

1040

line 59 and check box b

Pub. 926.

1040NR

line 58

Limit on wages subject to social security tax.

The limit on wages

1040-SS

Part I, line 4

subject to social security tax remains at $106,800 for 2011.

1041

Schedule G, line 6

Advance payment of earned income credit (EIC).

The option of

receiving advance payroll payments of EIC expires on December

31, 2010. Individuals eligible for EIC in 2011 can still claim the

If you do not file any of the above forms, complete Part IV of

credit when they file their federal income tax return.

Schedule H and follow the instructions under When and Where To

File on page H-3.

Estimated Tax Penalty

Paid Preparers

You may need to increase the federal income tax withheld from

your pay, pension, annuity, etc. or make estimated tax payments to

Paid preparer use only.

You must complete this part if you were

avoid an estimated tax penalty based on your household employ-

paid to prepare Schedule H, and are not an employee of the filing

ment taxes shown on line 26 of Schedule H. You may increase your

entity, and are not attaching Schedule H to Form 1040, 1040NR,

federal income tax withheld by filing a new Form W-4, Employee’s

1040-SS, or Form 1041. You must sign in the space provided and

Withholding Allowance Certificate, or Form W-4P, Withholding

give the filer a copy of the return in addition to the copy to be filed

Certificate for Pension or Annuity Payments. Make estimated tax

with the IRS.

payments by filing Form 1040-ES, Estimated Tax for Individuals.

For more information, see Pub. 505, Tax Withholding and Esti-

Form W-2 and Form W-3

mated Tax.

If you file one or more Forms W-2, you must also file Form W-3.

Estimated tax payments must be made as the tax liabil-

ity is incurred: by April 15, June 15, September 15, and

You must report both cash and noncash wages in box 1, as well

the following January 15. If you file your Form 1040 by

as tips and other compensation. The completed Forms W-2 and

CAUTION

January 31 and pay the rest of the tax that you owe, you

W-3 in the example (see page H-10) show how the entries are made.

do not need to make the payment due on January 15.

For detailed information on preparing these forms, see the Instruc-

tions for Forms W-2 and W-3, Wage and Tax Statement and Trans-

Exception.

You will not be penalized for failure to make estimated

mittal of Wages and Tax Statements.

tax payments if both 1 and 2 below apply for the year.

1. You will not have federal income tax withheld from wages,

Employee’s portion of taxes paid by employer.

If you paid all of

pensions, or any other payments you receive.

your employee’s share of social security and Medicare taxes, with-

2. Your income taxes, excluding your household employment

out deducting them from the employee, follow steps 1 through 3.

taxes, would not be enough to require payment of estimated taxes.

(See the example on pages H-8, H-9, and H-10.)

1. Enter the amounts you paid on your employee’s behalf in

boxes 4 and 6 (do not include your share of these taxes).

What Records To Keep

2. Add the amounts in boxes 3, 4, and 6. (However, if box 5 is

You must keep copies of Schedule H and related Forms W-2, W-3,

greater than box 3, then add the amounts in boxes 4, 5, and 6.)

W-4, and W-5, Earned Income Credit Advance Payment Certifi-

3. Enter the total in box 1.

cate, 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

On Form W-3, put an “X” in the “Hshld. emp.” box

security number. Each payday, you should record the dates and

located in box b, Kind of Payer.

amounts of:

TIP

•

Cash and noncash wage payments.

•

Any employee social security tax withheld.

•

Any employee Medicare tax withheld.

For information on filing Forms W-2 and W-3 electronically,

•

Any federal income tax withheld.

visit the website for Social Security, Business Services Online, at

•

Any advance EIC payments you made.

H-6

Instructions For Schedule H (Form 1040) Household Employment Taxes - 2010 Page 6

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