If you employ someone in your home — such as a nanny, senior caregiver, or housekeeper — you may have heard about Schedule H and wondered how it fits into your tax return.
Let’s break it down clearly and simply.
What Is Schedule H?
Schedule H (Form 1040) is the IRS form household employers use to report and pay federal household employment taxes.
Instead of filing separate quarterly business payroll returns, household employment taxes are reported directly on your personal federal income tax return using Schedule H. The total amount owed is added to your Form 1040.
Schedule H has been part of the federal income tax process since 1995. If you are required to file it and do not include it with your return, the IRS can assess penalties and interest — something no employer wants to face.
Who Needs to File Schedule H?
You generally must file Schedule H if:
- You paid a household employee $2,800 or more in cash wages in 2025 (Social Security and Medicare threshold), or
- You paid $1,000 or more in any calendar quarter for federal unemployment tax (FUTA) purposes.
Household employees typically include:
- Nannies
- Senior caregivers
- Housekeepers
- Personal assistants
If you control what work is done and how it is performed in your home, the worker is usually considered your employee under IRS rules.
What Taxes Are Reported on Schedule H?
Schedule H calculates the federal taxes associated with household employment, including:
Social Security Tax – 12.4%
Typically shared equally between employer and employee, with the employee's half being withheld from their pay on paydays.
Medicare Tax – 2.9%
Also typically shared equally between employer and employee, with the employee's half being withheld from their pay on paydays.
Together, these are commonly called FICA taxes.
Federal Unemployment Tax (FUTA)
The standard FUTA tax rate is 6% on the first $7,000 of each employee's wages. However, employers typically receive a 5.4% credit, reducing the effective FUTA tax rate to 0.6%.
This credit is why many employers pay far less in FUTA tax than they might expect. But if your state is classified as a FUTA Credit Reduction State, your available credit is reduced.
Important: State unemployment insurance (SUTA) is filed and paid directly to your state agency. It is not submitted with Schedule H.
Why Is the Schedule H Total Higher Than What I Withheld From My Employee?
This surprises many first-time household employers.
Schedule H includes:
- The employee’s share of Social Security and Medicare (what you withheld),
- Plus the employer’s matching share.
That’s why the total tax due is more than what came out of your employee’s paycheck.
As the employer, you are responsible for sending both portions to the IRS — even if you did not withhold the employee’s portion during payroll. If you did not withhold the employee’s share, you are now on the hook for their portion as well.
What Information Do You Need to Complete Schedule H?
To prepare Schedule H correctly, you’ll need:
- Your Employer Identification Number (EIN)
- Total household wages paid in 2025
- State unemployment tax payments
- Social Security and Medicare withholding totals
Accuracy matters. Incorrect EINs or Social Security numbers can lead to IRS notices and delays.
How Schedule H Connects to Your Personal Tax Return
Once completed, Schedule H is attached to your Form 1040. The total household employment taxes owed are added to your overall federal tax liability. If you are not required to file a personal income tax return, the Schedule H can be filed as a stand-alone filing.
To avoid surprises at tax time, many household employers:
- Increase estimated quarterly payments
- Adjust withholding at their own job
- Or set aside payroll tax funds throughout the year
The easiest solution, however, is to use a household payroll and tax service that withholds your employee’s taxes, collects your employer tax responsibility, and remits both to the IRS and state agencies on your behalf throughout the year. This approach keeps payments current, reduces the risk of underpayment, and makes filing Schedule H much more predictable.
Remember to take credit — or have your tax preparer take credit — for any estimated tax payments you made toward your household employment tax obligation throughout the year. These payments reduce what you owe when you file. If you are a HomeWork Solutions client, you can find a summary of your tax payments on your Year-End Summary in the filing cabinet of your HWS client portal.
Common Household Payroll Mistakes
- Misclassifying an employee as an independent contractor
- Forgetting to obtain an EIN and state registration account
- Not paying state unemployment taxes on time
- Waiting until tax season to calculate payroll taxes
Household payroll can be complicated and requires consistency and attention to detail.
A Stress-Free Way to Handle Schedule H
Understanding Schedule H is part of being a responsible household employer. Paying these taxes properly protects you and supports your employees’ eligibility for Social Security and Medicare benefits.
If calculating payroll taxes, tracking wage thresholds, and preparing Schedule H feels overwhelming, you’re not alone. Household employment rules are unique and require specialized knowledge.
At HomeWork Solutions, we’ve been the leading experts in household payroll and tax compliance since 1993. We help families stay organized, compliant, and confident — without stress or confusion.