Schedule H 2012 Household Employment Tax Checklist

Household Employment Taxes 2012 Checklist

Form, Purpose, and Year-Specific Context

Schedule H 2012 requires household employers to report and calculate employment taxes for domestic workers. No economic stimulus reconciliation, ACA penalties, or TCJA provisions apply to 2012 household employment taxes.

Year-Specific Programs Applicable to This Form

No credits, exclusions, or expanded provisions from stimulus packages, healthcare law, or tax reform apply to Schedule H in 2012. This form exists solely to document wages, Social Security and Medicare withholding, and federal unemployment tax for in-home workers.

Ten-Step Checklist

• A filing requirement applies when cash wages of $1,800 or more were paid to any single
• Withholding federal income tax from the wages of any household employee at any point
• Paying total cash wages of $1,000 or more to all household employees in any calendar

1. Step 1: Verify Household Worker Classification and 2012 Filing

   Requirements

   Schedule H must be filed if you meet any of these three conditions: household employee during the 2012 calendar year. during 2012 triggers the requirement to file Schedule H. quarter of 2011 or 2012 requires Schedule H to be filed.

   Meeting any single condition triggers the filing requirement for 2012. Calendar year taxpayers who had no household employees in that year do not need to file Schedule H.

2. Step 2: Gather and Organize Wage Records for All Household Employees

   Collect documentation of cash payments, checks, or other compensation paid during 2012 to nannies, housekeepers, caregivers, yard workers, or other in-home domestic workers.

   Household work is work done in or around your home and includes services provided by

   babysitters, caretakers, cleaning people, drivers, health aides, private nurses, and similar workers.

3. Step 3: Calculate Total Wages and Withholdings for Each Employee

   Document gross wages paid, federal income tax withheld if any, Social Security and Medicare taxes due, and federal unemployment tax liability for the full 2012 calendar year. Cash wages include wages paid by check or money order, but do not include the value of food, lodging, clothing, or other noncash items you give a household employee.

4. Step 4: Determine Social Security and Medicare Tax Obligations

   The Social Security tax rates for 2012 were 4.2 percent for employees and 6.2 percent for employers, resulting in a combined rate of 10.4 percent. Medicare tax was 1.45 percent each for employee and employer, creating a combined rate of 2.9 percent.

   While there is no wage base limit for Medicare taxes, the Social Security wage base limit was

   $110,100 in 2012. Apply these rates to eligible wages and verify that amounts withheld from employee paychecks are recorded accurately.

• Line 1: Enter total cash wages subject to Social Security taxes.
• Line 2: Multiply Line 1 by 10.4 percent to calculate Social Security taxes.
• Line 3: Enter total cash wages subject to Medicare taxes.
• Line 4: Multiply Line 3 by 2.9 percent for Medicare taxes.
• Line 5: Enter any federal income tax withheld.
• Line 6: Add Lines 2, 4, and 5 for the total.

5. Step 5: Complete Part I of Schedule H for Social Security, Medicare, and

   Federal Income Taxes

   Part I requires aggregate wage totals and tax calculations rather than individual employee information. Individual employee details such as names, addresses, and Social Security numbers are reported separately on Form W-2, not on Schedule H itself. Complete the following lines in Part I:

   If you paid any household employee cash wages of more than $110,100 in 2012, include on

   Line 1 only the first $110,100 of that employee’s cash wages. There is no limit on wages subject to Medicare tax on Line 3.

6. Step 6: Complete Part II for Federal Unemployment Tax Calculation

   Answer the qualifying questions on Lines 8 through 10 to determine whether you should complete Section A or Section B of Part II. These questions address whether you paid unemployment contributions to only one state, whether you paid all state unemployment contributions for 2012 by April 15, 2013, and whether all wages taxable for FUTA tax were also taxable for your state’s unemployment tax. Fiscal year filers must pay all required contributions for 2012 by the due date of their federal income tax returns, not including extensions.

7. Step 7: Calculate Federal Unemployment Tax Using 2012 FUTA Rules

   FUTA tax applies if you paid total cash wages of $1,000 or more in any calendar quarter of 2011 or 2012 to all household employees. The FUTA tax is calculated at 6.0 percent on the first

   $7,000 of cash wages paid to each employee during 2012.

   State unemployment tax credits reduce the effective rate to typically 0.6 percent, resulting in a maximum FUTA tax of $42 per employee if full credit is available. Enter on Line 13 the total cash wages you paid in 2012 to each household employee, but if you paid any employee more than

   $7,000, include only the first $7,000 of that employee’s cash wages.

8. Step 8: Attach Required Supporting Forms

   You must file Form W-2 for each household employee to whom you paid $1,800 or more of cash wages in 2012 that are subject to Social Security and Medicare taxes. If you file one or more

   Forms W-2, you must also file Form W-3 with the Social Security Administration.

   By January 31, 2013, you must give Copies B, C, and 2 of Form W-2 to each employee, and by

   February 28, 2013, send Copy A of all Forms W-2 with Form W-3 to the Social Security

   Administration. No additional household employment schedules beyond Schedule H are required for standard household employer reporting under the 2012 rules.

9. Step 9: Verify Accuracy of All Entries and Cross-Check with Employee

   Records

   Confirm that the wage totals reported on the form match household payroll documentation and that Social Security numbers are complete and correct on Forms W-2. All calculations must be

   mathematically accurate before filing, and you should review each line to ensure proper application of tax rates and wage base limits. You must keep copies of Schedule H and related

   Forms W-2, W-3, and W-4 for at least four years after the due date for filing Schedule H or the date the taxes were paid, whichever is later.

10. Step 10: Sign, Date, and File Schedule H with Your 2012 Tax Return

    Most household employers attach Schedule H to their Form 1040, 1040NR, 1040-SS, or 1041 and mail it to the address shown in those return instructions. Taxpayers who are not required to file a 2012 tax return must file Schedule H by itself by April 15, 2013, and mail it with payment to specific addresses based on state of residence.

    Complete Schedule H and put it in an envelope with your check or money order made payable to the United States Treasury for the total household employment taxes due. The taxpayer must sign and date the return, and paid preparers must also sign Schedule H if they were paid to prepare it and are not attaching it to Form 1040, 1040NR, 1040-SS, or Form 1041.

    Form-Specific Limitations

    Nonresident aliens who have household employees can file Schedule H with Form 1040NR if they meet the wage thresholds. The 2012 Schedule H instructions specifically list Form 1040NR as one of the returns to which the schedule should be attached, and they provide specific line-number guidance for nonresident alien filers.

    Schedule H does not allow credits or deductions beyond the employment tax calculation itself.

    Household worker wages are reported as household employment tax liability only, with no adjustment for dependent care credits or other household-based credits on this form.

    Lines Added, Removed, or Redesigned for 2012

    No significant line redesigns are documented in the 2012 Schedule H instructions as changes from prior versions. The form structure remained consistent with its standard household employer reporting framework in 2012.

    If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.