If you are a household employer who owes household employment tax, the IRS requires you to fill out Schedule H and include it with your 1040 when filing your annual income tax return. If you must fill out Schedule H, you’ll also have to fill out form W-2 to report your household employee’s wages and tax withholding and form W-3 to report your employee’s Social Security wages and withholding to the Social Security Administration. You pay the income and employment taxes that you should have withheld from your household employee’s pay when you file your 1040.

The IRS considers you a household employer if you hire someone full-time or part-time, directly or through an agency, to do household work. They can be considered a household employee whether they are paid an hourly wage, an annual salary or on a per-job basis. The IRS’s list of household workers includes but is not limited to babysitters, nannies, caretakers, housekeepers, domestic workers, drivers, home health aides, private nurses and yard workers. Just because you hire someone to perform this type of work does not automatically make them your household employee, however. The worker is considered an employee if you provide their equipment and supplies and they follow your specific instructions about how to perform the work. The worker is considered an independent contractor if they provide their own equipment and supplies and offer services to the general public. Someone who performs household work can also be employed by an agency that is responsible for that worker’s taxes.

Here are some examples of workers that would be considered household employees, for which you could be required to file Schedule H:

  • Kate lives in your pool house and provides babysitting services for your children five days a week between the time the school bus drops them off and the time you return home from work.
  • George comes to your 10-acre property Monday through Saturday and uses your riding lawnmower and other tools to take care of your land.
  1. What is IRS Form W-2 used for?

    Any employer who pays an employee $600 or more for the year, including noncash forms of remuneration, must file a form W-2 ... Read Answer >>
  2. I get multiple mailings to my house from companies that my spouse, children and I ...

    It's not uncommon for there to be more than one investment account holder in one household. If multiple members of your household ... Read Answer >>
  3. How can I calculate my withholding tax rate?

    Find out how to use the IRS website to estimate your proper withholding tax rate, and what you need to do if your information ... Read Answer >>
  4. When do I need to file an IRS Schedule F form?

    If you are a farmer, your farming business may require you to file a Schedule F with the IRS. Read Answer >>
Related Articles
  1. Taxes

    Have Household Help? Don't Get In Tax Trouble

    Hiring household workers can be a complicated process. Know what the government requires so you can prevent penalties and problems down the road.
  2. Taxes

    8 Things To Know Before Hiring Household Help

    Here's how to avoid the legal, tax and trust issues that can trap you when you become an employer.
  3. Taxes

    What Does Filing As Head Of Household Mean For Your Taxes?

    In order to file as head of household, you must meet several requirements. Find out whether being head of household comes with any tax benefits.
  4. Taxes

    6 Reasons to Use a Household Help Agency

    It's not just because they find you well-qualified workers. Agencies spare you the paperwork and taxes required when you hire on your own.
  5. Taxes

    How to Fill Out Your W-4 Form

    Your step-by-step guide to making sure your employer reports your tax withholding correctly to the IRS.
  6. Taxes

    Do You Qualify as Head of Household?

    When you hear the term “head of household,” what comes to mind? The breadwinner? The main source of household income? Unfortunately, it’s not that simple.
  7. Small Business

    Hiring? Regulations Small Businesses Need to Know

    When a small business becomes an employer, it has new responsibilities. Make sure you familiarize yourself with regulatory requirements.
  8. Taxes

    Small Business Tax Obligations: Payroll Taxes

    Don't leave it up to your accountant - owners are ultimately responsible for fulfilling tax obligations.
  9. Taxes

    The Ultimate Tax-Time Checklist

    Find out what information you need to pull together before filling out your return.
  10. Taxes

    The Purpose Of The IRS W-4 Form

    Why do you need to fill out a W-4 form and what does the IRS do with it?
  1. IRS Publication 926

    A document published by the Internal Revenue Service (IRS) that ...
  2. Household Employee

    An individual who is paid to provide a service within a residence. ...
  3. Household Income

    The combined gross income of all the members of a household who ...
  4. Head Of Household

    A status held by the person in a household who is running the ...
  5. Nanny Tax

    A federal tax that must be paid by people who hire household ...
  6. Withholding

    The portion of an employee's wages that is not included in his ...
Hot Definitions
  1. Buyback

    The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies ...
  2. Nest Egg

    A substantial sum of money that has been saved or invested for a specific purpose. A nest egg is generally earmarked for ...
  3. Denial Of Service Attack (DoS)

    An intentional cyberattack carried out on networks, websites and online resources in order to restrict access to its legitimate ...
  4. Perkins Loan

    A loan program that provides low-interest student loans to undergraduate and graduate students who demonstrate exceptional ...
  5. Wealth Management

    A high-level professional service that combines financial/investment advice, accounting/tax services, retirement planning ...
  6. Assets Under Management - AUM

    The market value of assets that an investment company manages on behalf of investors. Assets under management (AUM) is looked ...
Trading Center