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

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

Form 1040-ES, Estimated Tax for Individuals. For more infor-

Part IV and follow the instructions under

When and Where To

mation, see Pub. 505.

File, earlier.

Estimated tax payments must be made as the tax lia-

Paid Preparers

bility is incurred: by April 18, 2017; June 15, 2017;

September 15, 2017; and January 16, 2018. If you file

CAUTION

Paid Preparer Use Only. You must complete this part if you

your Form 1040 by January 31, 2018, and pay the rest of the

were paid to prepare Schedule H, and aren't an employee of the

tax that you owe with the form, you don't need to make the pay-

filing entity, and aren't attaching Schedule H to Form 1040,

ment due on January 16, 2018.

1040NR, 1040-SS, or 1041. You must sign in the space provi-

ded and give the filer a copy of Schedule H in addition to the

Exception. You won't be penalized for failure to make estima-

copy to be filed with the IRS.

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

Form W-2 and Form W-3

1. You won't have federal income tax withheld from wa-

ges, pensions, or any other payments you receive.

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

2. Your income taxes, excluding your household employ-

W-3. We encourage you to file electronically. If filing electron-

ment taxes, wouldn't be enough to require payment of estima-

ically via the SSA's Form W-2 Online service, the SSA will

ted taxes.

generate Form W-3 data from the electronic submission.

What Records To Keep

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

well as tips and other compensation. The completed

Forms

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

W-2 and W-3

in the example (in these instructions) show how

W-3, and W-4 for at least 4 years after the due date for filing

the entries are made. For detailed information on preparing

Schedule H or the date the taxes were paid, whichever is later.

these forms, see the General Instructions for Forms W-2 and

You must also keep records to support the information you en-

W-3.

ter on the forms you file. If you must file Form W-2, you will

Employee's portion of taxes paid by employer. If you paid

need to keep a record of each employee's name, address, and

all of your employee's share of social security and Medicare

SSN. Each payday, you should record and keep the dates and

amounts of:

taxes, without deducting the amounts from the employee's pay,

Cash and noncash wage payments,

the employee's wages are increased by the amount of that tax

for income tax withholding purposes. However, the tax you

Any employee social security tax you withhold or agree

paid isn't counted as social security and Medicare wages and

to pay for your employee,

isn't included in boxes 3 and 5 of Form W-2. Also, don't count

Any employee Medicare tax you withhold or agree to pay

the tax as wages for FUTA tax purposes. Follow steps 1

for your employee,

Any federal income tax you withhold, and

through 3 below. (See the

example

later in these instructions.)

Any state employment taxes you withhold.

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

What Is the Earned Income Credit

in boxes 4 and 6 (don't include your share of these taxes).

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

(EIC)?

box 5 is greater than box 3, then add the amounts in boxes 4, 5,

and 6.)

The EIC is a refundable tax credit for certain workers.

3. Include the total in box 1. Also include in box 1 any tax-

Which employees must I notify about the EIC? You must

able noncash wages which aren't reported in boxes 3 and 5.

notify your household employee about the EIC if you agreed to

withhold federal income tax from the employee's wages but

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

didn't do so because the income tax withholding tables showed

located in box b, Kind of Payer.

TIP

that no tax should be withheld.

You’re encouraged to notify each employee whose

For information on filing Forms W-2 and W-3 electronical-

wages for 2017 were less than $48,340 ($53,930 if

TIP

ly, go to the SSA's Employer W-2 Filing Instructions & Infor-

married filing jointly) that he or she may be eligible

mation website at SSA.gov/employer.

for the EIC for 2017.

How and when must I notify my employees? You must give

You Should Also Know

the employee one of the following items.

The official IRS Form W-2, which has the required infor-

Estimated Tax Penalty

mation about the EIC on the back of Copy B.

A substitute Form W-2 with the same EIC information on

You may need to increase the federal income tax withheld from

the back of the employee's copy that is on Copy B of the offi-

your pay, pension, annuity, etc., or make estimated tax pay-

cial IRS Form W-2.

ments to avoid an estimated tax penalty based on your house-

Notice 797, Possible Federal Tax Refund Due to the

hold employment taxes shown on Schedule H, line 26. You

Earned Income Credit (EIC).

may increase your federal income tax withheld by giving your

Your written statement with the same wording as Notice

employer a new Form W-4, or by giving the payer of your pen-

797.

sion a new Form W-4P. Make estimated tax payments by filing

H-9

Instructions For Schedule H (Form 1040) - Household Employment Taxes - 2017 Page 9

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