Instructions For Schedule H Household Employment Taxes (Form 1040)

1. Your child who lived with you was under age 18 or had a

If you file

Then enter the amount from

physical or mental condition that required the personal care of an

Form. . .

Schedule H, line 8, on. . .

adult for at least 4 continuous weeks in a calendar quarter.

1040

line 62

2. You were divorced and not remarried, a widow or widower,

or married to and living with a person whose physical or mental

1040NR

line 57

condition prevented him or her from caring for the child during that

4-week period.

1040-SS

Part I, line 4

1041

Schedule G, line 6

Exception for employees under age 18. Count the cash wages

you paid to a person who was under age 18 and not a student if

providing household services was his or her principal occupation.

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

Schedule H and follow the instructions under When and Where To

Part I. Social Security, Medicare, and Income

File on page H-3.

Taxes

Part II. Federal Unemployment (FUTA) Tax

Social security and Medicare taxes pay for retirement, disability,

and health benefits for workers and their families. You and your

FUTA tax, with state unemployment systems, provides for pay-

employees pay these taxes in equal amounts.

ments of unemployment compensation to workers who have lost

their jobs. Most employers pay both a federal and state unemploy-

For social security, the tax rate is 6.2% each for you and your

ment tax.

employee. For Medicare, the rate is 1.45% each. For 2006, the limit

on wages subject to social security tax is $94,200. There is no limit

The FUTA tax rate is 6.2%. But see Credit for contributions paid

on wages subject to the Medicare tax. If you did not deduct the

to state below. Do not deduct the FUTA tax from your employee’s

employee’s share from his or her wages, you must pay the

wages. You must pay it from your own funds. See page H-10 for a

employee’s share and your share (a total of 12.4% for social secur-

listing of some helpful contact information for each state.

ity and 2.9% for Medicare). See Form W-2 and Form W-3 on page

H-5 for more information.

You may be able to take a

Credit for contributions paid to state.

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

$1,500 test. Any household employee to whom you paid cash

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

wages of $1,500 or more in 2006 meets this test. The test applies to

for 2006 to your state unemployment fund by April 16, 2007. Fiscal

cash wages paid in 2006 regardless of when the wages were earned.

year filers must pay all required contributions for 2006 by the due

See Pub. 926 for more information. Or, visit the website for Social

date of their federal income tax returns (not including extensions).

Security at .

Contributions are payments that a state requires you, as an

Enter on line 1 the total of cash wages (see Cash wages on

Line 1.

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

page H-2) paid in 2006 to each household employee who meets the

unemployment benefits. However, contributions do not include:

$1,500 test, explained above.

•

Any payment such as FUTA tax deducted or deductible from

your employees’ pay;

If you paid any household employee cash wages of

•

more than $94,200 in 2006, include on line 1 only the

Penalties, interest, or special administrative taxes not included

first $94,200 of that employee’s cash wages.

in the contributions rate the state gave you; and

CAUTION

•

Voluntary contributions you paid to get a lower experience

rate.

Line 2.

Multiply the amount on line 1 by 12.4% (.124) and enter the

result on line 2.

Answer the questions on lines 10 through 12

Lines 10 through 12.

Enter on line 3 the total of cash wages (see Cash wages on

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

Line 3.

page H-2) paid to each employee in 2006.

Fiscal year filers. If you paid all state unemployment contribu-

tions for 2006 by the due date of your return (not including exten-

Multiply the amount on line 3 by 2.9% (.029) and enter the

Line 4.

sions), check the “Yes” box on line 11. Check the “No” box if you

result on line 4.

did not pay all of your state contributions.

Enter on line 5 any federal income tax you withheld from

Lines 5.

Line 13.

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

the wages you paid your household employees in 2006.

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

Line 6.

Add lines 2, 4, and 5 and enter the result on line 6.

which you paid unemployment contributions.

Line 7.

Enter on line 7, any advance EIC payments you made to

Line 14.

Enter your state reporting number. If you do not have one,

your household employees in 2006.

contact your state’s unemployment tax agency. See the Appendix in

Subtract the amount on line 7 from the amount on line 6 and

Pub. 926 for your state’s contact information.

Line 8.

enter the result on line 8.

Enter the total of contributions (defined earlier) you paid

Line 15.

Add the cash wages you paid to all your household employ-

Line 9.

to your state unemployment fund for 2006. If you did not have to

ees for each calendar quarter of 2005 and 2006. Is the total for any

make contributions because your state gave you a zero percent

quarter in 2005 or 2006 $1,000 or more?

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

Yes. Complete Part II of Schedule H.

Enter the total of cash wages (see Cash wages on page

Line 16.

No. Follow the instructions in the chart below.

H-2) you paid in 2006 to each household employee, including

H-4

Instructions For Schedule H Household Employment Taxes (Form 1040) - 2006 Page 4

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