What Schedule H (2013) Is For
Form 1040 Schedule H is an IRS form used to report household employment taxes for domestic workers such as nannies, caregivers, or housekeepers. Taxpayers attach it to Form 1040 when reporting individual income tax, as these employment taxes must be included in the overall tax return. The form can be opened as a PDF file and reviewed using Adobe Acrobat, which features tools such as the Search button, Find box, and column heading filters, all of which are found in Item Files.
The purpose of Schedule H is to calculate Social Security, Medicare, and federal unemployment taxes for wages paid in a private home. The Internal Revenue Service requires this form when specific wage thresholds are met, allowing taxpayers—including resident aliens—to remain compliant with the Internal Revenue Code. Schedule H works in conjunction with other IRS forms, such as Schedule A, Schedule C, Schedule D, Schedule G, and Schedule I, when taxpayers prepare a complete tax return.
When You’d Use Schedule H
A taxpayer uses Schedule H when household employees receive enough cash wages to trigger employment tax requirements. The Internal Revenue Service requires this filing when a worker is paid at least $1,800 in 2013 or when total wages to all employees reach $1,000 in any quarter, regardless of filing status or whether the taxpayer files as head of household, married filing jointly, or married filing separately. Taxpayers may also need it when the worker requests that income tax be withheld.
Schedule H is filed with Form 1040, as a standalone return, or with Form 1040-X when amending a prior filing. Suppose the taxpayer received income reported on forms such as Form 1099-R, Form 2553, Schedule K-1, or Form 1065. In that case, those amounts still appear separately on the tax return, while Schedule H handles household employment taxes. Filing may require accurate bank accounts for payment, especially when paying electronically through online banking or another financial institution.
Key Rules or Details for 2013
For 2013, household employers were required to pay Social Security and Medicare taxes on cash wages paid to domestic employees once the federal threshold was met. Federal unemployment taxes applied to the first $7,000 of wages, and most employers received a state unemployment credit through programs supervised by the U.S. Department of Labor. These amounts must be entered accurately to avoid increasing taxable income or future tax liability.
Wages paid to a spouse, a child under age twenty-one, or a surviving parent were exempt under the Internal Revenue Code. Taxpayers who used IRS forms such as Form 5500-EZ, Form 8955-SSA, Schedule SSA, or filings within the Form 5500 Series still needed to complete Schedule H separately when employing household workers. Accurate entries support retirement savings calculations, tax credits, and other tax benefits such as the Retirement Savings Contributions Credit.
For complete details on wage reporting, withholdings, and tax filings, see our guide for Individual Schedules.
Step-by-Step (High Level)
Step 1: Confirm that Schedule H applies
The taxpayer reviews 2013 wages to see if any household employee was paid at least $1,800 or if total wages reached $1,000 in any quarter. The taxpayer also checks whether any withheld income tax was deducted from the worker’s pay at their request.
Step 2: Gather records and IRS forms
The taxpayer collects wage records and bank account details, and downloads Schedule H as a PDF file from the Internal Revenue Service website. The taxpayer then opens it in Adobe Acrobat and, if needed, gathers Form 1040 and other IRS forms used for the individual income tax return.
Step 3: Calculate household employment taxes
The taxpayer enters cash wages to compute Social Security, Medicare, and federal unemployment tax on Schedule H using the 2013 rates. The taxpayer ensures that exempt family wages are excluded, ensuring that taxable income and overall tax liability remain accurate.
Step 4: Transfer totals and file the return
The taxpayer transfers the Schedule H total to the proper line on Form 1040 and completes the rest of the tax return. The taxpayer files and pays electronically or by mail, using online banking or direct deposit options, and keeps any confirmation message or transaction ID from the payment processing system.
Common Mistakes and How to Avoid Them
- Misclassifying household workers as independent contractors: Determine worker status based on control—household employees follow your instructions and use your tools—so taxes are reported correctly.
- Failing to report unemployment taxes when the $1,000 threshold is met: Track quarterly wages and file FUTA tax when required to avoid IRS notices and penalties.
- Not maintaining complete payroll and employment records: Keep detailed wage logs, withholding records, deposit information, and documentation used to prepare your return.
- Using a Social Security Number instead of an EIN: Apply for and use an Employer Identification Number when reporting household employment taxes.
- Submitting incomplete or incorrect Form W-2 information: Verify names, addresses, SSNs, and wage amounts before issuing Form W-2 or filing your individual return to prevent processing errors.
What Happens After You File
Once Schedule H is filed, the Internal Revenue Service processes the employment taxes with the rest of the Form 1040 return. Payment processing varies depending on the financial institution, and taxpayers using direct deposit may receive refunds more quickly unless a payment delay occurs. The automated system provides a confirmation message and transaction ID that can be viewed through online banking or an Info Menu Mobile portal.
If the IRS identifies mismatched data, such as errors related to account number information or entries tied to Form 1120, Form 1120-A, or Form 3800, the agency may contact the taxpayer. A refund status update may follow if adjustments are made, particularly when amending with Form 1040-X or requesting extensions using forms like Form 4868, Form 8736, or Form 8800. Keeping accurate records supports compliance with the Pension Benefit Guaranty Corporation and long-term retirement savings planning.
FAQs
Does a taxpayer need Schedule H if a payroll service was used?
Schedule H is required when the taxpayer is the employer, even if payroll companies assist with calculations or deposits.
Is an Employer Identification Number required?
Yes, the form cannot be filed using a Social Security number.
Does Schedule H apply to a teenager who babysits occasionally?
No, a worker under eighteen is exempt unless household work is the worker’s primary occupation.
What if the taxpayer discovers an error after filing their return?
The taxpayer should file Form 1040-X with an updated Schedule H.
Are wages paid to family members taxable for the household employment tax?
Wages paid to a spouse, child under twenty-one, or parent are generally exempt.
For more resources on filing or understanding other IRS forms, visit our Form Summaries and Guides Library.
