Leading up to the April 15th tax filing deadline, most Americans are busy making sure their personal income tax returns are good to go — assuming they don’t need an extension to file in October instead. During this hectic time, don’t forget that if you paid a nanny, senior caregiver, personal assistant or other household employee $2,700 or more during the calendar year, you need to make sure you’ve filled out a Schedule H to attach your Form 1040.
What is a Schedule H?
Schedule H is the form the IRS requires you to use to report your federal household employment tax liability for the year. It includes:
The Social Security taxes you paid and withheld from your caregiver.
The Medicare taxes you paid and withheld from your caregiver.
The federal unemployment insurance taxes you paid.
The federal income taxes you withheld from your caregiver.
What information is needed to fill out my Schedule H?
The form will ask you for the total amount of federal income taxes you withheld from your employee, the wages you paid them and the state unemployment insurance taxes you paid. You’ll use these three pieces of information to do several different calculations as you complete the 2024 Schedule H form.
Read more about the payroll and tax responsibilities you have as a household employer.
What happens after I follow all the Schedule H instructions?
Most online tax preparation software will walk you through the steps necessary to accurately complete your Schedule H. Just be aware that you may have to pay extra for it. Once you’ve entered in all the relevant data, the total household employment taxes you paid for the year will appear on line 60a of the Schedule 4 if you check it prior to submitting. You’ll attach both your Schedule H and Schedule 4 forms to your personal income tax return.
What if I forget to fill out a Schedule H?
If you fail to include a Schedule H with your 2024 personal income tax return, the IRS and the Social Security Administration may be unable to recognize that you’ve paid the correct amount of federal taxes. You will likely receive notices from one or both agencies asking for clarification and could face penalties as well. It’s possible that you will have to amend your personal income tax return once these headaches are sorted out, which requires even more of your time or more money to pay an accountant or CPA to handle it for you.
The good news is, if you’re a HomePay client, you don’t have to worry about this scenario because we’ll prepare the Schedule H for you at the beginning of the year. From there, you just have to file it with your personal income tax return or hand it off to your accountant or CPA if they are preparing your return for you.
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