Instructions For Schedule H (Form 1040) - 2016 (Page 5 of 12) in pdf

completed Form W-4, Employee's Withholding Allowance

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

Certificate.

employees for each calendar quarter of 2015 and 2016. Is the

total for any quarter in 2015 or 2016 $1,000 or more?

For 2016, the social security tax rate is 6.2% each for you

Yes. Complete Schedule H, Part II.

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

limit on wages subject to social security tax is $118,500. There

No. Follow the instructions in the chart below.

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

If you file

Then enter the amount from

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

Form. . .

Schedule H, line 8, on. . .

pay the employee's share and your share (a total of 12.4% for

social security and 2.9% for Medicare tax) of tax. See Form

1040

line 60a

W-2 and Form W-3, later, for more information.

1040NR

line 59a

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

1040-SS

Part I, line 4

withhold a 0.9% Additional Medicare Tax from wages you pay

1041

Schedule G, line 6

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

You’re required to begin withholding Additional Medicare Tax

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

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

Part IV and follow the instructions under When and Where To

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

File.

period until the end of the calendar year. Additional Medicare

Part II. Federal Unemployment (FUTA) Tax

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

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

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

Medicare tax are subject to Additional Medicare Tax withhold-

ments of unemployment compensation to workers who have

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

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

employment tax.

For more information on Additional Medicare Tax, visit

IRS.gov and enter “Additional Medicare Tax” in the search

The FUTA tax rate is 6.0% (0.060). But see Credit for con-

box.

tributions paid to state below. Don't deduct the FUTA tax from

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

your employee's wages. You must pay it from your own funds.

more in cash wages during 2016, you must report and pay so-

Credit for contributions paid to state. You may be able to

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

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

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

net FUTA tax rate of 0.6% (0.006). But to do so, you must pay

ges paid in 2016 regardless of when the wages were earned.

all the required contributions for 2016 to your state unemploy-

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

ment fund by April 18, 2017. Fiscal year filers must pay all re-

quired contributions for 2016 by the due date of their federal

income tax returns (not including extensions).

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

ges, earlier) paid in 2016 to each household employee who

Contributions are payments that a state requires you, as an

meets the $2,000 test, explained earlier.

employer, to make to its unemployment fund for the payment

of unemployment benefits. However, contributions don't in-

If you paid any household employee cash wages of

clude:

more than $118,500 in 2016, include on line 1 only

Any payments deducted or deductible from your employ-

the first $118,500 of that employee's cash wages.

CAUTION

ees' pay;

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

Penalties, interest, or special administrative taxes; or

enter the result on line 2.

Voluntary contributions you paid to get a lower state ex-

perience rate. See the instructions for line 17 for more informa-

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

tion.

ges, earlier) paid in 2016 to each employee who meets the

$2,000 test. There is no limit on wages subject to the Medicare

If you paid contributions to any credit reduction state, see

tax.

the instructions for line 23.

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

Lines 10 through 12. Answer the questions on lines 10

ter the result on line 4.

through 12 to see if you should complete Section A or Sec-

tion B of Part II.

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

earlier) paid to each employee in 2016 that exceeded $200,000.

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

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

tributions for 2016 by the due date of your return (not includ-

ter the result on line 6.

ing extensions), check the “Yes” box on line 11. Check the

“No” box if you didn't pay all of your state contributions by the

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

due date of your return.

from the wages you paid to your household employees in 2016.

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

Line 13. Enter the two-letter abbreviation of the name of the

eral income taxes.

state (or the District of Columbia, Puerto Rico, or the U.S. Vir-

gin Islands) to which you paid unemployment contributions.

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

H-5

Instructions For Schedule H (Form 1040) - 2016 Page 5

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