Instructions For Schedule H Household Employment Taxes (Form 1040)

Cash wages.

Cash wages include wages paid by checks, money

Important Dates!

orders, etc. Cash wages do not include the value of food, lodging,

clothing, or other noncash items you give a household employee.

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

You must

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

For 2006, you can generally give your employee trans-

January 31, 2007

Give your employee Form W-2.

portation benefits such as transit passes worth up to

TIP

$105 per month without the benefits counting as cash

February 28, 2007

Send Copy A of Form W-2 with

wages. However, the value of benefits over $105 a

(April 2, 2007, if

Form W-3 to the Social Security

month is included as wages. See Transportation (Commuting) Ben-

you file

Administration.

efits in Pub. 15-B, Employer’s Tax Guide to Fringe Benefits, for

electronically)

more information.

Calendar quarter.

A calendar quarter is January through March,

April 16, 2007 (see

File Schedule H and pay your

April through June, July through September, or October through

page H-3 for

household employment taxes with

December.

exceptions)

your 2006 tax return.

Workers you get from an

Workers who are not your employees.

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

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

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

The Basics

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

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

public in an independent business.

Reminder

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

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

If you must file a 2006 Form W-2, Wage and Tax Statement, for

the general public. He hires his own helpers and provides his own

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

tools and supplies. Neither Paul nor his helpers are your employees.

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

Social Security Administration.

For more information, see Pub. 926, Household Employer’s Tax

Guide.

Who Needs To File Schedule H?

Who Needs To File Form W-2 and

You must file Schedule H (Form 1040) if you answer “Yes” to any

of the questions on lines A, B, or C.

Form W-3?

Only 8 lines for most people.

Depending on your answers, you may

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

find that you only have to complete lines A, 1 through 4, 6, 8, and 9.

you paid $1,500 or more of cash wages in 2006 that are subject to

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

If you hired someone to do

Did you have a household employee?

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

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

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

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

you withheld federal income tax from the wages of any household

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

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

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

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

done.

W-3.

Example. 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

Do You Have an Employer

provided the household equipment and supplies Betty needed to do

Identification Number (EIN)?

her work. Betty is your household employee.

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

If you do not have an EIN, see Form SS-4, Application for Em-

examples of workers who do household work are:

ployer Identification Number. The instructions explain how you

can get an EIN immediately over the internet, by telephone, or in

about 4 weeks if you apply by mail. See How To Get Forms and

Babysitters

Drivers

Nannies

Publications on page H-7 for details on how to get forms and

Caretakers

Health aides

Private nurses

publications including Form SS-4. Do not use a social security

Cleaning people

Housekeepers

Yard workers

number in place of an EIN.

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

Can Your Employee Legally Work in

agency or from a list provided by an agency or association. Also, it

the United States?

does not matter if the wages paid are for work done hourly, daily,

weekly, or by the job.

It is unlawful to employ an alien who cannot legally work in the

If a government agency files Schedule H for the worker, you

United States. When you hire a household employee to work for

Note.

do not need to file it.

you on a regular basis, you and the employee must each complete

H-2

Instructions For Schedule H Household Employment Taxes (Form 1040) - 2006 Page 2

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