Schedule H 2024 Household Employment Tax Rules

housekeepers, yard workers, or similar domestic workers who perform services in or around your home. The Tax Cuts and Jobs Act rules remain in effect for 2024, and this form calculates

Social Security, Medicare, and federal unemployment taxes owed on wages.

No year-specific expansions such as Economic Impact Payments, American Rescue Plan Act provisions, unemployment exclusions, or Affordable Care Act modifications apply to Form 1040

Schedule H for 2024. Without any temporary adjustments related to the pandemic, the form adheres to the standard household employment tax rules that were established in previous years.

Understanding Household Employee Status

A household employee performs work in or around your home, and you control both what work gets done and how the worker completes it. This control test determines employee status even if you grant the worker freedom of action, because what matters is your right to control the details of how the work gets done.

Household work includes services performed in or around your residence. Common examples include babysitters, butlers, caretakers, cleaning staff, cooks, drivers, health aides, housekeepers, maids, nannies, private nurses, and yard workers who provide domestic services under your direction.

The worker qualifies as your employee regardless of whether the work is full-time or part-time, whether you hired the worker through an agency or from a referral list, or whether you pay hourly, daily, weekly, or by the job. Self-employed workers do not qualify as household employees because they control how their own work gets done, typically provide their own tools, and offer services to the general public in an independent business.

Filing Threshold and Wage Requirements

You must file Schedule H if total cash wages paid to household employees meet or exceed the threshold amount specified in the 2024 Schedule H instructions. For Social Security and

Medicare taxes, you need to withhold and pay these taxes if you paid cash wages of $2,700 or more in 2024 to any one household employee.

Cash wages include payments made by check or money order. These payments do not include the value of food, lodging, clothing, transit passes, or other noncash items you provide to a household employee.

Federal unemployment tax applies if you paid total cash wages of $1,000 or more in any calendar quarter of 2023 or 2024 to all household employees. A calendar quarter includes

January through March, April through June, July through September, or October through

December.

When calculating these thresholds, do not count wages paid to

• Your spouse: Wages paid to a spouse are excluded when determining whether

household employment tax filing thresholds are met.

• Your child under age 21: Compensation paid to a child who was under age 21 at any

time during 2024 does not count toward the household employment tax thresholds.

• Your parent (with specific exceptions): Wages paid to a parent are generally excluded

from threshold calculations unless one of the statutory child care–related exceptions applies.

• Employees under age 18: Wages paid to an employee who was under age 18 during

2024 are excluded unless providing household services was the employee’s principal occupation.

Social Security and Medicare Tax Calculations

The Social Security tax rate remains 6.2 percent each for the employee and employer in 2024, with a wage base limit of $168,600. You stop paying Social Security tax on an employee’s wages once that employee’s taxable wages reach $168,600 for the year.

There is no wage base limit for Medicare tax, and the rate of Medicare tax remains at 1.45 percent for both the employee and the employer, which is unchanged from 2023. You must withhold Additional Medicare Tax at 0.9 percent from wages you pay to an employee in excess of $200,000 in a calendar year.

Only the employee is subject to the Additional Medicare Tax; no employer match is necessary.

Schedule H Part I requires you to enter total cash wages subject to Social Security tax on line 1, then multiply that amount by 12.4 percent to calculate the combined employee and employer

Social Security tax on line 2.

Line 3 requests total cash wages subject to Medicare tax, and line 4 shows the result of multiplying line 3 by 2.9 percent. Line 5 captures total cash wages subject to Additional

Medicare Tax withholding (wages exceeding $200,000), and line 6 shows the 0.9 percent

Additional Medicare Tax withheld.

Federal Unemployment Tax Obligations

The Federal Unemployment Tax Act (FUTA) applies to the first $7,000 you pay to each employee during a calendar year, and the FUTA tax rate is 6.0 percent for 2024. You may take a credit of up to 5.4 percent against the FUTA tax if you pay all required contributions for 2024 to your state unemployment fund by April 15, 2025.

This credit results in a net FUTA tax rate of 0.6 percent. Only employers pay FUTA tax from their own funds without collecting or deducting it from employee wages.

Schedule H Part II guides you through federal unemployment tax calculations. To ascertain whether Section A or Section B of Part II should be completed, you must respond to the inquiries on lines 10 through 12.

Form W-2 Filing Requirements

You must file Form W-2 for each household employee to whom you paid $2,700 or more of cash wages in 2024 that are subject to Social Security and Medicare taxes. Even if the wages are not subject to Social Security and Medicare taxes, you are required to file Form W-2 for any household employee from whom you withheld federal income tax.

You must provide employees with Form W-2 by January 31, 2025. By the same date, you are required to submit Copy A of Form W-2 along with Form W-3 to the Social Security

Administration.

Electronic filing through the Social Security Administration’s Form W-2 Online service generates

Form W-3 data automatically from your electronic submission of Forms W-2. Paper filers must mail both Form W-3 and Copy A of all Forms W-2 to the Social Security Administration Direct

Operations Center.

Schedule H Attachment and Reporting

Schedule H must be filed with your complete Form 1040, Form 1040-SR, Form 1040-SS, Form

1040-NR, or Form 1041 return. Report household employment taxes from Schedule H line 26 on Schedule 2 (Form 1040), line 9 when filing Form 1040 or Form 1040-SR.

Form 1040-SS filers report the amount on Part I, line 4, and Form 1041 filers use Schedule G,

Part I, line 7. Do not file Schedule H separately unless you are not required to file a tax return for other reasons.

You must have an Employer Identification Number to file Schedule H. Apply for one online through the Internal Revenue Service website rather than using your Social Security number in place of an Employer Identification Number.

Record Retention and Compliance

Keep copies of wage records, employment agreements, Schedule H, Forms W-2, Form W-3,

Form W-4, and state unemployment tax documentation for at least four years. The Internal

Revenue Service may request these records to verify Schedule H calculations and employment tax compliance.

State employment taxes remain a separate obligation. Contact your state unemployment tax agency to determine whether you need to pay contributions to your state unemployment fund, pay or collect other state employment taxes, or carry workers’ compensation insurance.

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