What Schedule H (Form 1040) 2015 Is For
IRS Form 1040 Schedule H (2015) is used to report and pay household employment taxes for individuals who hired a household employee during 2015. A household employee is someone who performs work in a private residence and whose work is controlled by the employer. This may include nannies, au pairs, caregivers, home health aides, personal chefs, housekeepers, gardeners, or other domestic workers. If the employer directs how the work must be completed, the worker is generally considered a household employee under Internal Revenue Service rules.
This form enables taxpayers to calculate the Social Security, Medicare, federal income tax, and FUTA tax owed on wages paid to household employees. It works in conjunction with Form 1040 and IRS forms used for income tax reporting. Schedule H is required when an employer meets specific wage thresholds that trigger employment tax responsibilities. The form is submitted either with Form 1040 or on its own if the taxpayer does not otherwise need to file a federal income tax return.
When You’d Use Schedule H
A taxpayer uses Schedule H when hiring a household employee whose cash wages meet the 2015 thresholds for Social Security, Medicare, or FUTA tax. This includes nannies, au pairs, personal chefs, caregivers, and other household employees whose work is directed by the employer, as outlined in Internal Revenue Service guidelines. The form is attached to IRS Form 1040 or filed alone if the taxpayer is not otherwise required to submit a federal income tax return.
Schedule H is also used when reporting federal income taxes for household employment wages that require Form W-2 and Form W-3 filing. It applies to situations involving income tax withholding agreements, SUTA tax obligations, and prior years that may need correction using Form 1040X. Taxpayers who paid $1,900 or more to a single worker or reached $1,000 in any quarter for all household employees must file the form.
Key Rules or Details for 2015
The 2015 rules require Schedule H when a household employee receives at least $1,900 in cash wages subject to Social Security and Medicare taxes. The employer must withhold the employee’s share, match it, and include these amounts on the federal income tax portion of Form 1040. An additional Medicare tax may apply if wages exceed the IRS thresholds.
FUTA tax applies once total household employment wages reach $1,000 or more in any calendar quarter, and timely SUTA tax payments may qualify the taxpayer for credits. Employers must issue Form W-2, file Form W-3, and ensure all IRS forms match the income tax entries reported on Form 1040. These rules also affect deductions, credits, and compliance for household employees across prior years.
For complete details on wage reporting, withholdings, and tax filings, see our guide for Individual Schedules.
Step-by-Step (High-Level)
Step 1: Determine whether Schedule H applies
The taxpayer reviews the wages paid to determine whether employment taxes are applicable. A household employee who meets IRS criteria must be classified appropriately, including au pairs and personal chefs who perform services within the household.
Step 2: Complete Part I for Social Security, Medicare, and optional federal income tax withholding
The taxpayer enters cash wages, calculates taxable Social Security wages, computes Medicare tax, and includes any withheld income tax. The taxpayer also calculates and withholds Additional Medicare Tax when required.
Step 3: Complete Part II for FUTA tax
The taxpayer verifies state unemployment contributions, calculates taxable FUTA wages, and determines the amount owed. If state taxes were paid on time, the taxpayer may qualify for a credit.
Step 4: Complete Part III to combine all household employment taxes
Total taxes due are carried to IRS Form 1040, Form 1040A, or related tax forms. Individuals who do not file a federal income tax return submit Schedule H alone.
Step 5: Prepare Form W-2 and Form W-3 for each household employee
These forms must be distributed to employees and submitted to the Social Security Administration. They ensure proper credit for Social Security and Medicare reimbursements.
Step 6: Review supporting requirements
The employer keeps copies of all tax forms, including Publication 15, and checks the IRS website for updates. Many taxpayers use the Search button or Find box in IRS PDF files to locate instructions or reference prior years.
Common Mistakes and How to Avoid Them
- Misclassifying a household employee as an independent contractor: Determine worker status based on employer control to ensure proper tax reporting and avoid penalties.
- Misapplying wage thresholds: Review Social Security, Medicare, and FUTA thresholds each year to accurately report household employment taxes.
- Missing Form W-2 or Form W-3 filing deadlines: Prepare and file these forms on time to avoid penalties and keep wage reporting compliant.
- Failing to calculate or coordinate state unemployment taxes: Confirm SUTA obligations and ensure state and federal unemployment rules are applied correctly.
- Not verifying entries or storing records securely: Double-check all information entered into tax software or mobile tools and maintain proper documentation for compliance purposes.
If your corporation is facing tax challenges, explore our business tax relief services for professional support.
What Happens After You File
Once submitted, the Internal Revenue Service processes Schedule H and applies the household employment tax amount to the taxpayer’s account. If the taxpayer included estimated tax payments or relied on direct deposit adjustments, these amounts reduce any balance owed. The Social Security Administration uses information from Forms W-2 and W-3 to record employee earnings.
Employers who discover an error later may file an amended return using Form 1040X. Those who did not submit a required Form W-2 or who improperly calculated taxes may receive notices from the IRS. Keeping clear records, including trade or business activity summaries, small business expense logs, or rental property deduction worksheets, ensures accurate amendments when needed. Some taxpayers review power management tools such as Power Grid or consult Business Insights Hub materials for additional organizational support.
FAQs
Do household employers have to withhold federal income tax?
Withholding is optional unless an employee requests it. If both parties agree, the employer reports withheld amounts on Form W-2 and Schedule H.
Does hiring an au pair require filing Schedule H?
An au pair may qualify as a household employee depending on how the work is structured. Employers follow Internal Revenue Service rules to determine proper classification.
What if a household employee was paid less than the threshold?
If the employee did not meet the Social Security or FUTA wage thresholds, the employer generally does not file Schedule H.
Are state unemployment taxes required?
Most states require SUTA tax. Filing and payment deadlines vary by state.
Can Schedule H be amended for prior years?
Yes, the taxpayer files Form 1040X and attaches a corrected Schedule H for the relevant prior years.
For more resources on filing or understanding other IRS forms, visit our Form Summaries and Guides Library.
