Household Employment Taxes 2021 Checklist
Schedule H applies exclusively to employers of household workers who meet cash-wage thresholds established by the Internal Revenue Service for tax year 2021. The form serves as the primary mechanism for reporting Social Security, Medicare, federal unemployment, and withheld federal income taxes on wages paid to household employees.
Filing Requirements and Threshold Determinations
You must complete Schedule H if you paid cash wages to household workers who meet specific statutory thresholds during 2021. Cash wages include payments made by check, money order, or other negotiable instruments, but they do not include the value of food, lodging, clothing, or other noncash items provided to employees.
The $2,300 threshold applies separately to each household employee for Social Security and
Medicare tax purposes. Federal unemployment tax obligations arise when you pay total cash wages of $1,000 or more in any calendar quarter to all household employees during 2020 or
2021.
Household Worker Classification Standards
Household workers include babysitters, nannies, housekeepers, maids, cleaning personnel, cooks, drivers, health aides, private nurses, caretakers, butlers, and yard workers. You employ a household worker when you control what work the individual performs and how the individual completes that work.
The employment test focuses on your legal right to direct and control the worker’s activities.
Your classification does not depend on whether you provide detailed daily instructions or allow operational freedom in completing assigned tasks.
Employer Identification Number Requirements
Household employers must obtain an Employer Identification Number to file Schedule H with the Internal Revenue Service. You cannot use your Social Security number in place of an EIN under any circumstances, and the 2021 instructions explicitly prohibit this substitution.
Applicants may obtain an EIN through three methods
- Apply online at IRS.gov/EIN and receive your EIN immediately upon completing the
application process.
- Fax Form SS-4 to the designated IRS processing center and generally receive your EIN
within four business days.
- Mail Form SS-4 to the appropriate IRS address and receive your EIN within
approximately four weeks.
Enter “Applied For” and the application date in the EIN field on Schedule H if you have not received your number by the filing deadline. The requirement applies to all household employers regardless of the number of employees, total wages paid, or filing status used for individual income tax purposes.
Eligible Filers and Form Attachment Rules
Individual taxpayers who file Form 1040, Form 1040-SR, Form 1040-NR, Form 1040-SS, or
Form 1041 must attach Schedule H to their primary tax return when reporting household employment taxes. Nonresident aliens filing Form 1040-NR may use Schedule H to report household employee wages and associated employment taxes, and estates and trusts filing
Form 1041 may also attach Schedule H when they employ household workers.
Schedule H always attaches to your primary tax return if you file one of the eligible forms listed in the official instructions. You file Schedule H by itself only when you have no obligation to file a tax return for 2021 due to income falling below the standard filing threshold, and you must mail the standalone form with payment to specific addresses based on your state of residence.
Social Security and Medicare Tax Calculations
The Social Security tax rate for 2021 remains 6.2 percent for both employer and employee, totaling 12.4 percent on combined contributions. For 2021, the Social Security wage base limit is $142,800. If you make more than this amount to a single employee, you are exempt from paying Social Security tax.
Medicare tax applies at 1.45 percent each for employer and employee, with no wage base limitation. You must withhold an additional 0.9 percent Medicare tax from wages exceeding
$200,000 paid to any individual employee during the calendar year, and this Additional Medicare
Tax applies only to the employee portion.
Qualified sick leave wages and qualified family leave wages for leave taken before April 1,
2021, receive different tax treatment under provisions of the Families First Coronavirus
Response Act, as amended. These wages are not subject to the employer share of Social
Security tax, resulting in a 6.2 percent rate rather than the standard 12.4 percent combined rate.
Federal Unemployment Tax Obligations
You must pay federal unemployment tax if you paid total cash wages of $1,000 or more in any calendar quarter during 2020 or 2021 to household employees. The FUTA tax rate applies only to the employer and does not require withholding from employee wages.
Credit reduction states that have not repaid federal loans for unemployment benefits require employers to pay additional federal unemployment tax beyond the standard rate. U.S.
employers who paid wages subject to USVI unemployment laws must calculate their credit reduction using Worksheet 2 provided in the Schedule H instructions, as the Virgin Islands was the sole credit reduction state for 2021.
Form W-2 and Form W-3 Reporting Obligations
You must file Form W-2 for each household employee to whom you paid $2,300 or more of cash wages in 2021 that are subject to Social Security and Medicare taxes. Additionally, you are required to submit Form W-2 if you withheld federal income tax from the wages of any household employee, irrespective of the total wage amount.
Employers must provide Copy B, Copy C, and Copy 2 of Form W-2 to each employee by
January 31, 2022. Copy A of all Forms W-2 must be sent with Form W-3 to the Social Security
Administration by the same deadline.
Electronic filing through the Social Security Administration’s Form W-2 Online service generates
Form W-3 automatically from the submitted wage data. Paper filers must manually complete
Form W-3 as a transmittal document and mail both forms to the Social Security Administration
Direct Operations Center in Wilkes-Barre, Pennsylvania.
Ten-Step Filing Checklist for Schedule H 2021
Follow these steps to ensure accurate completion and timely filing of Schedule H for tax year
2021
Step 1: Determine whether cash wages paid to any household employee meet the filing
threshold of $2,300 or more before completing any lines on the form.
Step 2: Obtain an Employer Identification Number through IRS.gov/EIN, by faxing Form SS-4,
or by mailing Form SS-4, and confirm your correct taxpayer name and address match Form
1040.
Step 3: Gather household employee names, addresses, Social Security numbers, and wages
paid, and confirm all wages reported align with amounts withheld or owed for 2021.
Step 4: Calculate Social Security and Medicare taxes on reported wages using 2021 tax rates
and wage bases as stated in the Schedule H instructions.
Step 5: Determine federal income tax withholding obligations for household employees as
specified in the 2021 instructions and applicable Publication 926.
Step 6: Complete Schedule H lines in order, entering wages, taxes, and calculated amounts,
and stop if tax liability does not require filing per 2021 thresholds.
Step 7: Attach the completed Schedule H to Form 1040, Form 1040-SR, Form 1040-NR, Form
1040-SS, or Form 1041, and do not file Schedule H separately if you file one of these returns.
Step 8: Verify whether Form W-2 requirements from Publication 926 apply for current-year
reporting if an employee worked for you in a prior year and is rehired in 2021.
Step 9: Sign and date Form 1040 with Schedule H attached, and confirm both documents bear
the same tax year designation of 2021 and taxpayer identification.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 10: File Schedule H with your primary tax return by April 18, 2022, or mail Schedule H by
itself to the address listed in the instructions if you have no filing obligation.
Filing Deadlines and Payment Procedures
Most filers must submit Schedule H with their 2021 tax return by April 18, 2022. Fiscal year filers must submit Schedule H by their fiscal year return due date, including any approved extensions.
Taxpayers who file Schedule H by itself because they have no filing obligation for Form 1040 must mail the completed schedule with payment to specific addresses based on their state of residence. These standalone filing addresses appear on page 19 of the 2021 instructions and differ from standard Form 1040 filing locations.
You pay household employment taxes reported on Schedule H with your income tax payment when you file your return. Make your check or money order payable to “United States Treasury” with your name, address, Social Security number, and “2021 Schedule H” written on the payment instrument.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
