Instructions For Schedule H (Form 1040) 2003 (Page 4 of 8) in pdf

You may be able to take a

Credit for Contributions Paid to State.

Part III. Total household Employment Taxes

credit of up to 5.4% against the FUTA tax, resulting in a net tax rate

Follow the instructions in the chart below.

Line 28.

of 0.8%. But to do so, you must pay all the required contributions

for 2003 to your state unemployment fund by April 15, 2004. Fiscal

THEN do not complete Part IV but

year filers must pay all required contributions for 2003 by the due

IF you file

enter the amount from Schedule

date of their Federal income tax returns (not including extension).

Form. . .

H, line 27, on . . .

Contributions are payments that a state requires you, as an

1040

line 59

employer, to make to its unemployment fund for the payment of

unemployment benefits. However, contributions do not include:

1040NR

line 55

•

Any payment such as FUTA tax deducted or deductible from

your employees’ pay,

1040 – SS

line 4

•

Penalties, interest, or special administrative taxes not included

1041

Schedule G, line 6

in the contributions rate the state gave you, and

•

Voluntary contributions you paid to get a lower experience

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

rate.

Schedule H and follow the instructions under When and Where To

File on page H-2.

Lines 10 Through 12.

Answer the questions on lines 10 through 12

to see if you should complete Section A or Section B of Part II.

Fiscal Year Filers. If you paid all state unemployment contribu-

Form W-2 and Form W-3

tions for 2003 by the due date of your return (not including exten-

sions), check the “Yes” box on line 11. Otherwise, check the “No”

If you file Form W-2, you must also file Form W-3.

box.

The titles of the boxes tell you what information to enter. The

completed Forms W-2 and W-3 in the example (see page H-7) show

Enter the two-letter abbreviation of the name of the state

Line 13.

how the entries are made.

(or the District of Columbia, Puerto Rico, or the Virgin Islands) to

which you paid unemployment contributions.

If you paid the

Employee’s Portion of Taxes Paid by Employer.

employee’s share of social security and Medicare taxes, the follow-

Enter the total contributions (defined earlier) you paid to

Line 15.

ing rules apply. See pages H-5, H-6, and H-7.

your state unemployment fund for 2003. If you did not have to

•

Enter the amount you paid for the employee in boxes 4 and 6

make contributions because your state gave you a zero percent

(do not include your share of these taxes).

experience rate, enter “0% rate” on line 15.

•

Add the amounts in boxes 4 and 6 to the amount in box 3 (or

Enter the total cash wages you paid in 2003 to each

Line 16.

box 5 if that amount is larger).

household employee, including employees paid less than $1,000.

•

Enter the total in box 1.

However, do not include cash wages paid in 2003 to any of the

following individuals.

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

•

Your spouse.

box b.

TIP

•

Your child who was under age 21.

•

Your parent.

If you paid any household employee more than $7,000 in 2003,

include on line 16 only the first $7,000 of that employee’s cash

You Should Also Know

wages.

Complete all columns that apply. If you do not, you will

Line 18.

What Is New for 2004

not get a credit. If you need more space, attach a statement using the

same format as line 18. Your state will provide the experience rate.

The tax rates mentioned in the instructions for Parts I

If you do not know your rate, contact your state unemployment tax

and II of Schedule H will not change. The 2004 Em-

TIP

agency.

ployee Social Security and Medicare Tax Withholding

You must complete columns (a), (b), (c), and (i), even if you

Table is in Pub. 926, Household Employer’s Tax

were not given an experience rate. If you were given an experience

Guide.

rate of 5.4% or higher, you must also complete columns (d) and (e).

Limit on Wages Subject to Social Security Tax.

The $87,000

If you were given a rate of less than 5.4%, you must complete all

amount in the instructions for Part I of Schedule H will increase to

columns.

$87,900.

If you were given a rate for only part of the year, or the rate

changed during the year, you must complete a separate line for each

Estimated Tax Penalty

rate period.

You may need to increase the Federal income tax withheld from

Column (c). Enter the taxable wages on which you must pay

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

taxes to the unemployment fund of the state shown in column (a). If

avoid an estimated tax penalty based on your household employ-

your experience rate is zero percent, enter the amount of wages you

ment taxes (line 27). You may increase your Federal income tax

would have had to pay taxes on if that rate had not been granted.

withheld by filing a new Form W-4, Employee’s Withholding

Column (i). Enter the total contributions (defined earlier) you

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

paid to the state unemployment fund for 2003 by April 15, 2004.

Pension or Annuity Payments. Make estimated tax payments by

Fiscal year filers, enter the total contributions you paid to the state

filing Form 1040 – ES, Estimated Tax for Individuals. For more

unemployment fund for 2003 by the due date of your return (not

information, see Pub. 505, Tax Withholding and Estimated Tax.

including extensions). If you are claiming excess credits as pay-

ments of state unemployment contributions, attach a copy of the

Exception.

You will not be penalized for failure to make estimated

letter from your state.

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

H-4

Instructions For Schedule H (Form 1040) 2003 Page 4

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