Household Employment Taxes 2023 Checklist
Schedule H applies to employers of household workers in 2023 and requires reporting of Social
Security, Medicare, and federal unemployment taxes. Unlike other employment forms, it calculates household employment tax liability directly on the employer’s individual return, integrating payroll obligations with personal income tax without requiring separate quarterly filings for employers below threshold amounts.
Understanding Your Tax Obligations
You must file Schedule H if you paid cash wages of $2,600 or more to any one household employee during 2023, triggering Social Security and Medicare tax obligations. The Social
Security tax rate is 6.2 percent each for employer and employee (12.4 percent total) on wages
up to $160,200 per employee for the year.
Once an employee’s wages reach the $160,200 threshold, you stop withholding Social Security tax on that employee for the remainder of the year, but continue withholding Medicare tax on all wages. Each employee and employer is subject to a Medicare tax rate of 1.45%, with no wage base limit.
Employers must also withhold Additional Medicare Tax at 0.9 percent from wages exceeding
$200,000 paid to any household employee in a calendar year. Additional Medicare Tax applies only to the employee, with no employer share, but you remain responsible for withholding it from the employee’s wages.
Federal unemployment tax obligations arise when you pay total cash wages of $1,000 or more in any calendar quarter of 2022 or 2023 to household employees. A calendar quarter consists of
January through March, April through June, July through September, or October through
December.
Ten-Step Compliance Process
Step 1: Verify Employee Information and Wages
Verify that the individual worked for you as a household employee during 2023 and that cash wages totaled $2,600 or more, as defined in Publication 926. Gather the employee copies of
Form W-2 and the employer copies you retained, then confirm that the Social Security number matches your records and employment documentation.
Step 2: Calculate Total Cash Wages
Calculate total 2023 wages paid to household employees, including only cash wages subject to
Social Security and Medicare taxes as defined in Publication 926. Cash wages include payments made by check, money order, or electronic transfer but exclude noncash payments such as food, lodging, clothing, and transit passes.
Step 3: Determine Federal Unemployment Tax Liability
Determine whether you owe federal unemployment tax based on the $1,000 per calendar quarter wage threshold documented in Publication 926. Record your state unemployment insurance account number if you maintain one for state unemployment tax reporting purposes.
Step 4: Complete Part I for Social Security and Medicare Taxes
Complete Part I of Schedule H to report total wages paid and calculate Social Security tax at 6.2 percent on applicable wages up to $160,200 per employee. Calculate Medicare tax at 1.45 percent on all wages, and include lines 5 and 6 for Additional Medicare Tax withholding if any employee received wages exceeding $200,000. Record amounts on corresponding lines per the
2023 Schedule H instructions.
Step 5: Complete Part II for Federal Unemployment Tax
Complete Part II if the federal unemployment tax applies based on the $1,000 per calendar quarter threshold. Calculate federal unemployment tax at the 2023 rate on the first $7,000 of cash wages paid per employee, then enter net FUTA after applying any allowed state unemployment tax credit.
Step 6: File Forms W-2 and W-3
Send Copy A of Form W-2 with Form W-3 to the Social Security Administration by January 31,
2024, for each employee to whom you paid $2,600 or more of cash wages subject to Social
Security and Medicare taxes. Give Copies B, C, and 2 of Form W-2 to each employee by the same date.
You are not required to send Form W-2 to the Social Security Administration if you did not withhold federal income tax and the Social Security and Medicare wages were below $2,600 for
2023. Forms W-2 are never attached to your Form 1040 when filing Schedule H.
Step 7: Report Tax Liability on Your Return
Report the total Schedule H tax liability on Form 1040, 1040-SR, 1040-NR, 1040-SS, or 1041 as instructed for 2023. Integrate household employment tax with other income and self-employment tax calculations following the line references that align with the 2023 Form
1040 assembly order.
Step 8: Maintain Required Records
Maintain contemporaneous records, including each household employee’s name, address,
Social Security number, and dates of employment. Document gross wages paid by pay period and amounts withheld or paid for the 2023 tax year as specified in Publication 926.
Step 9: Sign and File Your Return
Sign and date Schedule H and your tax return as required by Internal Revenue Service filing procedures. Both spouses must sign if filing jointly, and you should reference the IRS Where to
File page for Form 1040 Schedule H for 2023 to determine the proper mailing address based on your state of residence.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 10: Confirm Eligibility to Use Schedule H
Confirm you qualify to use Schedule H by verifying you are not filing as a corporate entity.
Household workers must be classified as employees rather than independent contractors who would receive Form 1099-NEC instead of Form W-2. Nonresident aliens can file Schedule H with Form 1040-NR if they have household employees.
Form-Specific Requirements
Schedule H can be filed with Form 1040, 1040-SR, 1040-NR, 1040-SS, or 1041 for the 2023 tax year. If you are not required to file a 2023 tax return because your income falls below the filing threshold, you must still file Schedule H by itself by April 15, 2024, if you have household employment tax obligations.
Form W-2 is mandatory for household employees meeting the wage thresholds, while Form
1099-NEC is prohibited for household worker relationships. You are not required to withhold federal income tax from wages you pay to a household employee unless your household employee requests withholding by providing a completed Form W-4 and you agree to do so.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
