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

Noncash wages paid to household employees aren't subject

$2,000 test. If you pay a household employee $2,000 or

to social security taxes or Medicare taxes; however, they are

more in cash wages during 2017, you must report and pay so-

subject to federal income tax unless a specific exclusion ap-

cial security and Medicare taxes on all the wages, including the

plies. Report the value of taxable noncash wages in box 1 of

first $2,000 paid to that employee. The test applies to cash wa-

Form W-2 together with cash wages. Don't show noncash wa-

ges paid in 2017 regardless of when the wages were earned.

ges in box 3 or in box 5 of Form W-2. See section 5 of Pub. 15

See Pub. 926 for more information. Or, go to the SSA's website

for more information on cash and noncash wages, and Pub.

at SSA.gov/pubs/EN-05-10021.pdf.

15-B for more information on fringe benefits.

Line 1. Enter on line 1 the total of cash wages (see

Cash wa-

Transportation (commuting) benefits. If you reimburse

ges, earlier) paid in 2017 to each household employee who

your employee for qualified parking, transportation in a com-

meets the

$2,000

test, explained earlier.

muter highway vehicle, transit passes, or commuting by bicy-

If you paid any household employee cash wages of

cle, you may be able to exclude the cash reimbursement

more than $127,200 in 2017, include on line 1 only

amounts from counting as cash wages subject to social security

the first $127,200 of that employee's cash wages.

CAUTION

and Medicare taxes. Qualified parking is parking at or near

your home or at or near a location from which your employee

Line 2. Multiply the amount on line 1 by 12.4% (0.124) and

commutes to your home. It doesn't include parking at or near

enter the result on line 2.

your employee's home. For 2017, you can reimburse your em-

Line 3. Enter on line 3 the total of cash wages (see

Cash wa-

ployee up to $255 per month for qualified parking; $255 per

ges, earlier) paid in 2017 to each employee who meets the

month for combined commuter highway vehicle transportation

$2,000

test, explained earlier. There is no limit on wages sub-

and transit passes; or $20 multiplied by the number of qualified

ject to the Medicare tax.

bicycle commuting months during the calendar year. See

Line 4. Multiply the amount on line 3 by 2.9% (0.029) and en-

Transportation (Commuting) Benefits in Pub. 15-B for more

ter the result on line 4.

information. Any cash reimbursement over these amounts is in-

Line 5. Enter on line 5 the total cash wages (see

Cash

wages,

cluded as wages.

earlier) paid to each employee in 2017 that exceeded $200,000.

Part I. Social Security, Medicare, and

Line 6. Multiply the amount on line 5 by 0.9% (0.009) and en-

Federal Income Taxes

ter the result on line 6.

Social security and Medicare taxes fund retirement, survivor,

Line 7. Enter on line 7 any federal income tax you withheld

disability, and health benefits for workers and their families.

from the wages you paid to your household employees in 2017.

You and your employees generally pay these taxes in equal

See Pub. 926 and Pub. 15 for information on withholding fed-

amounts.

eral income taxes.

You’re not required to withhold federal income tax from

Line 8. Add lines 2, 4, 6, and 7 and enter the result on line 8.

wages you pay a household employee. You should withhold

Line 9. Review the cash wages you paid to all your household

federal income tax only if your household employee asks you

employees for each calendar quarter of 2016 and 2017. Is the

to withhold it and you agree. The employee must give you a

total for any quarter in 2016 or 2017 $1,000 or more?

completed Form W-4, Employee's Withholding Allowance

Yes. Complete Schedule H, Part II.

Certificate.

No. Follow the instructions in the chart below.

For 2017, the social security tax rate is 6.2% each for you

and your employee. The Medicare tax rate is 1.45% each. The

IF you file

THEN enter the amount from

limit on wages subject to social security tax is $127,200. There

Form. . .

Schedule H, line 8, on. . .

is no limit on wages subject to the Medicare tax. If you didn't

1040

line 60a

deduct the employee's share from his or her wages, you must

pay the employee's share of tax and your share of tax, a total of

1040NR

line 59a

12.4% for social security and 2.9% for Medicare tax. See

Form

1040-SS

Part I, line 4

W-2 and Form

W-3, later, for more information.

1041

Schedule G, line 6

In addition to withholding Medicare tax at 1.45%, you must

withhold a 0.9% Additional Medicare Tax from wages you pay

If you don't file any of the above forms, complete Schedule H,

to an employee in excess of $200,000 in a calendar year.

Part IV and follow the instructions under

When and Where To

You’re required to begin withholding Additional Medicare Tax

File, earlier.

in the pay period in which you pay wages in excess of

Part II. Federal Unemployment (FUTA) Tax

$200,000 to an employee and continue to withhold it each pay

period until the end of the calendar year. Additional Medicare

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

Tax is only imposed on the employee. There is no employer

ments of unemployment compensation to workers who have

share of Additional Medicare Tax. All wages that are subject to

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

Medicare tax are subject to Additional Medicare Tax withhold-

employment tax.

ing if paid in excess of the $200,000 withholding threshold.

For more information on Additional Medicare Tax, go to

The FUTA tax rate is 6.0% (0.060). But see

Credit for con-

IRS.gov/ADMT.

tributions paid to state

next. Don't collect or deduct the FUTA

H-5

Instructions For Schedule H (Form 1040) - Household Employment Taxes - 2017 Page 5

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