How Do I Report Household Employee Wages to the IRS

Reporting household employee wages to the IRS can be a bit of a challenge, but it's a crucial step to ensure you're fulfilling your tax obligations.

You'll need to obtain a Social Security number or Employer Identification Number for each household employee, which can be done by having them fill out Form SS-5 or Form W-7, respectively.

If you're paying cash wages, you'll need to use Form 1040, Schedule H, to report these wages.

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To report household employee wages to the IRS, you'll need to gather some essential information.

You'll need to know the total cash wages you paid to your household employee.

To accurately report these wages, you'll also need to know the amount of Social Security and Medicare withheld.

Having this information will help you fill out Schedule H correctly.

You'll also need to know any federal income tax withheld.

You'll need to withhold FICA taxes from your household employee's wages if you pay them $2,800 or more in a year. This includes Social Security and Medicare taxes, which together amount to 7.65% of their wages.

The good news is that you can choose to pay your employee's share of these taxes yourself, rather than withholding them from their wages.

To calculate the amount to withhold, you'll need to determine the employee's share of FICA taxes, which is 6.2% for Social Security and 1.45% for Medicare.

Here's a breakdown of the FICA tax rates:

You'll need to withhold this amount from your employee's wages and pay it to the IRS along with your own share of the taxes.

Some important exceptions to note: you don't need to withhold FICA taxes from wages paid to your spouse, child under 21, parent (unless an exception applies), or an employee under 18 who is not performing household work as their principal occupation.

You'll need multiple forms to report the wages you pay your household employee and the taxes you withhold.

Form W-2 is required if you pay Social Security and Medicare wages of $2,700 or more.

You must give W-2's to household employees by January 31 each year so they have time to file income taxes.

If you've hired a household employee, such as a nanny or housekeeper, and paid them cash wages of $2,700 or more in 2024 ($2,800 in 2025), you'll need to file Schedule H.

You're required to file Schedule H if you withheld federal income tax from your employee's wages. This includes taxes like Social Security and Medicare (FICA).

If you pay wages subject to FICA tax, FUTA tax, or withhold federal income tax from your employee's wages, you'll need to file a Schedule H (Form 1040), Household Employment Taxes.

You can also file Schedule H by itself to report household employment taxes, but only if you're not required to file a return.

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Tax forms for household employees can be overwhelming, but don't worry, you can report their wages to the IRS accurately. Multiple forms are required to report wages and taxes withheld.

You'll need to file a Schedule H to attach to your annual 1040, which can be a challenge. A signature-ready Schedule H is available with services like SurePayroll, making it easier to comply with tax regulations.

Tax forms can be time-consuming to prepare, but outsourcing payroll can be a wise choice. With services like SurePayroll, you can have your 1040-ES filed on your behalf, saving you time and effort.

At year-end, you'll need to provide W-2s to your household employees, which can be a logistical challenge. Services like SurePayroll can deliver W-2s to customers by January 2, giving you time to distribute them to employees.

If you're feeling overwhelmed, consider using a service that can support you with tax forms and assistance. A customer care team with evening hours, available by phone or chat, can be a big help.

Here are the tax forms you'll need to report household employee wages: