Instructions for IRS Form 1040 Schedule H - Household Employment Taxes 2018

January 1, 2018 "Instructions For Irs Form 1040 Schedule H - Household Employment Taxes" contain the updated filing procedures for the IRS-issued Form 1040. Download your copy of the instructions by clicking the link below.

IRS Form 1040 is a tax form issued by the United States Internal Revenue Service.

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Department of the Treasury
Internal Revenue Service
2018 Instructions for Schedule H (Form 1040)
Household Employment Taxes
Household
Here is a list of forms you need to complete:
Employers
Schedule H for figuring your household employment taxes.
Form W-2 for reporting wages paid to your employees.
Form W-3 for sending Copy A of Form(s) W-2 to the Social Security Adminis-
tration (SSA).
For more information, see What Forms Must You File? in Pub. 926, Household
Employer's Tax Guide.
We have been asked:
Do I need to pay household employment taxes for 2018? If you have a household
employee, you need to withhold and pay social security and Medicare taxes if you
paid cash wages of $2,100 or more in 2018 to any one household employee. See
Did
you have a household employee?
and the
Line A
instructions for more information.
You need to pay federal unemployment tax if you paid total cash wages of $1,000 or
more in any calendar quarter of 2017 or 2018 to household employees. See the
Part II.
Federal Unemployment (FUTA) Tax
instructions for more information.
How do I file Schedule H? File Schedule H with your Form 1040, 1040NR,
1040-SS, or 1041. If you’re not filing a 2018 tax return, file Schedule H by itself.
Do I make a separate payment? No. You pay both income and employment taxes to
the United States Treasury when you file Schedule H with your return.
When do I pay? Most filers must pay by April 15, 2019 (April 17, 2019, if you live
in Maine or Massachusetts).
How many copies of Form W-3 do I send to the SSA? Send one copy of Form W-3
with Copy A of Form(s) W-2 to the SSA, and keep one copy of Form W-3 for your
records.
Important Dates!
By
You must
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
January 31, 2019
Give your employee Form W-2 and send Copy A of Form(s)
W-2 with Form W-3 to the SSA. Go to
SSA.gov/employer
for details.
April 15, 2019 (April 17, 2019, if you
File Schedule H and pay your household employment taxes
live in Maine or Massachusetts)
with your 2018 tax return.
Section references are to the Internal Revenue Code unless
Contents
Page
otherwise noted.
What About State Employment Taxes?
3
. . . . . . . . . . . . . .
Contents
Page
When and Where To File
3
. . . . . . . . . . . . . . . . . . . . . . .
What's New
2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How To Fill In Schedule H, Form W-2, and Form W-3
4
. . .
Reminders
2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule H
4
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Who Needs To File Schedule H?
2
. . . . . . . . . . . . . . . . . .
Worksheet 1. Worksheet for Credit for Late
Contributions
7
. . . . . . . . . . . . . . . . . . . . . . . . . .
Who Needs To File Form W-2 and Form W-3?
3
. . . . . . . .
Worksheet 2. Worksheet for Household
Do You Have an Employer Identification Number
Employers in a Credit Reduction State
8
. . . . . . . . .
(EIN)?
3
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Form W-2 and Form W-3
7
. . . . . . . . . . . . . . . . . . . .
Can Your Employee Legally Work in the United
Estimated Tax Penalty
9
States?
3
. . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H-1
Nov 20, 2018
Cat. No. 21451X
Department of the Treasury
Internal Revenue Service
2018 Instructions for Schedule H (Form 1040)
Household Employment Taxes
Household
Here is a list of forms you need to complete:
Employers
Schedule H for figuring your household employment taxes.
Form W-2 for reporting wages paid to your employees.
Form W-3 for sending Copy A of Form(s) W-2 to the Social Security Adminis-
tration (SSA).
For more information, see What Forms Must You File? in Pub. 926, Household
Employer's Tax Guide.
We have been asked:
Do I need to pay household employment taxes for 2018? If you have a household
employee, you need to withhold and pay social security and Medicare taxes if you
paid cash wages of $2,100 or more in 2018 to any one household employee. See
Did
you have a household employee?
and the
Line A
instructions for more information.
You need to pay federal unemployment tax if you paid total cash wages of $1,000 or
more in any calendar quarter of 2017 or 2018 to household employees. See the
Part II.
Federal Unemployment (FUTA) Tax
instructions for more information.
How do I file Schedule H? File Schedule H with your Form 1040, 1040NR,
1040-SS, or 1041. If you’re not filing a 2018 tax return, file Schedule H by itself.
Do I make a separate payment? No. You pay both income and employment taxes to
the United States Treasury when you file Schedule H with your return.
When do I pay? Most filers must pay by April 15, 2019 (April 17, 2019, if you live
in Maine or Massachusetts).
How many copies of Form W-3 do I send to the SSA? Send one copy of Form W-3
with Copy A of Form(s) W-2 to the SSA, and keep one copy of Form W-3 for your
records.
Important Dates!
By
You must
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
January 31, 2019
Give your employee Form W-2 and send Copy A of Form(s)
W-2 with Form W-3 to the SSA. Go to
SSA.gov/employer
for details.
April 15, 2019 (April 17, 2019, if you
File Schedule H and pay your household employment taxes
live in Maine or Massachusetts)
with your 2018 tax return.
Section references are to the Internal Revenue Code unless
Contents
Page
otherwise noted.
What About State Employment Taxes?
3
. . . . . . . . . . . . . .
Contents
Page
When and Where To File
3
. . . . . . . . . . . . . . . . . . . . . . .
What's New
2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How To Fill In Schedule H, Form W-2, and Form W-3
4
. . .
Reminders
2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule H
4
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Who Needs To File Schedule H?
2
. . . . . . . . . . . . . . . . . .
Worksheet 1. Worksheet for Credit for Late
Contributions
7
. . . . . . . . . . . . . . . . . . . . . . . . . .
Who Needs To File Form W-2 and Form W-3?
3
. . . . . . . .
Worksheet 2. Worksheet for Household
Do You Have an Employer Identification Number
Employers in a Credit Reduction State
8
. . . . . . . . .
(EIN)?
3
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Form W-2 and Form W-3
7
. . . . . . . . . . . . . . . . . . . .
Can Your Employee Legally Work in the United
Estimated Tax Penalty
9
States?
3
. . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H-1
Nov 20, 2018
Cat. No. 21451X
Reminders
Contents
Page
What Records To Keep
9
. . . . . . . . . . . . . . . . . . . . . . . .
Outsourcing payroll duties. You’re responsible to ensure that
What Is the Earned Income Credit (EIC)?
9
. . . . . . . . . . . .
tax returns are filed and deposits and payments are made, even
Rules for Business Employers
9
. . . . . . . . . . . . . . . . . . . .
if you contract with a third party to perform these acts. You re-
main responsible if the third party fails to perform any required
How To Correct Schedule H
10
. . . . . . . . . . . . . . . . . . . .
action. Before you choose to outsource any of your payroll and
How To Get Forms and Publications
10
. . . . . . . . . . . . . .
related tax duties (that is, withholding, reporting, and paying
Completed Examples of Schedule H, Form W-2, and
over social security, Medicare, FUTA, and income taxes) to a
Form W-3
10
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
third-party payer, such as a payroll service provider or report-
Privacy Act and Paperwork Reduction Act Notice
13
. . . . . .
ing agent, go to
IRS.gov/OutsourcingPayrollDuties
for helpful
information on this topic. For more information about the dif-
ferent types of third-party payer arrangements, see section 16
Future Developments
of Pub. 15.
Paid preparers. If you use a paid preparer, your paid prepar-
For the latest information about developments related to Sched-
er must sign Schedule H in Part IV unless you’re attaching
ule H and its instructions, such as legislation enacted after they
Schedule H to Form 1040, 1040NR, 1040-SS, or 1041. A paid
were published, go to IRS.gov/ScheduleH.
preparer must sign Schedule H and provide the information re-
What's New
quested in the Paid Preparer Use Only section only if the pre-
parer was paid to prepare Schedule H and isn't your employee.
Changes to tax rates and wage threshold. The social securi-
The preparer must give you a copy of the return in addition to
ty tax rate is 6.2% each for the employee and employer, un-
the copy to be filed with the IRS.
changed from 2017. The social security wage base limit is
If you’re required to file a 2018 Form W-2 for any house-
$128,400. The Medicare tax rate is 1.45% each for the employ-
hold employee, you must also send Form W-3 with Copy A of
ee and employer, unchanged from 2017. There is no wage base
Form(s) W-2 to the SSA. You’re encouraged to file your
limit for Medicare tax.
Forms W-2 and W-3 electronically. If filing electronically via
the SSA's Form W-2 Online service, the SSA generates Form
If you pay a household employee $2,100 or more in cash
W-3 data from the electronic submission of Form(s) W-2. Go
wages during 2018, you must report and pay social security
to the SSA's Employer W-2 Filing Instructions & Information
and Medicare taxes on all the wages, including the first $2,100
website at
SSA.gov/employer
to learn about electronic filing.
paid to that employee. If you pay less than $2,100 to a house-
hold employee, don't pay social security or Medicare taxes on
Who Needs To File Schedule H?
that household employee's wages. For more information, see
Cash wages
and
$2,100
test, later.
You must file Schedule H if you answer “Yes” to any of the
questions on lines A, B, or C of Schedule H.
For information about the rates and wage threshold that will
apply in 2019, see Pub. 926 (released in December 2018).
Did you have a household employee? If you hired someone
to do household work and you could control what work he or
Qualified parking exclusion and commuter transportation
she did and how he or she did it, you had a household employ-
benefit. For 2018, the monthly exclusion for qualified parking
ee. This is true even if you gave the employee freedom of ac-
is $260 and the monthly exclusion for commuter highway vehi-
tion. What matters is that you had the right to control the de-
cle transportation and transit passes is $260.
tails of how the work was done.
Bicycle commuting reimbursements. The Tax Cuts and Jobs
Example. You paid Betty Oak to babysit your child and do
Act (P.L. 115-97) suspends the exclusion of qualified bicycle
light housework 4 days a week in your home. Betty followed
commuting reimbursements from your employee's income for
your specific instructions about household and child care du-
tax years beginning after 2017 and before 2026.
ties. You provided the household equipment and supplies Betty
Credit reduction state. A state that hasn't repaid money it
needed to do her work. Betty is your household employee.
borrowed from the federal government to pay unemployment
Household work is work done in or around your home.
benefits is a “credit reduction state.” The Department of Labor
Some examples of workers who do household work are:
determines these states. If an employer pays wages that are
subject to the unemployment tax laws of a credit reduction
state, that employer must pay additional federal unemployment
Babysitters
Cooks
Maids
tax.
Butlers
Drivers
Nannies
Caretakers
Health aides
Private nurses
For 2018, there is one credit reduction state (U.S. Virgin Is-
Cleaning people
Housekeepers
Yard workers
lands). If you paid wages that were subject to the unemploy-
ment compensation laws of a credit reduction state, your credit
against federal unemployment tax will be reduced based on the
If a worker is your employee, it doesn't matter whether the
credit reduction rate (for example, 0.024) for that credit reduc-
work is full or part time or that you hired the worker through
tion state. See
Worksheet
2, later, to figure your credit reduc-
an agency or from a list provided by an agency or association.
tion for 2018.
Also, it doesn't matter if the wages paid are for work done
hourly, daily, weekly, or by the job.
H-2
If you’re a home care service recipient receiving home care
or in about 4 weeks if you apply by mail. Go to
IRS.gov/Forms
services through a program administered by a federal, state, or
to get forms and publications, including Form SS-4.
local government agency, and the person who provides your
Can Your Employee Legally Work in
care is your household employee, you can ask the IRS to au-
the United States?
thorize an agent under section 3504 to report, file, and pay all
federal employment taxes, including FUTA taxes, on your be-
It is unlawful to employ a person who can't legally work in the
half. See Form 2678, Employer/Payer Appointment of Agent,
United States. When you hire a household employee to work
for more information.
for you on a regular basis, you and the employee must each
If a government agency or third-party agent reports
complete part of the U.S. Citizenship and Immigration Services
and pays the employment taxes on wages paid to your
TIP
(USCIS) Form I-9, Employment Eligibility Verification. You
household employee on your behalf, you don't need to
must verify that the employee is either a U.S. citizen or a per-
file Schedule H to report those taxes.
son who can legally work in the United States and you must
keep Form I-9 for your records. You can get the form and the
Workers who aren't your employees. Workers you get from
USCIS Handbook for Employers by going to the USCIS web-
an agency aren't your employees if the agency is responsible
site at USCIS.gov/I-9-Central, or by calling 800-870-3676.
for who does the work and how it is done. Self-employed
What About State Employment
workers are also not your employees. A worker is self-em-
Taxes?
ployed if only he or she can control how the work is done. A
self-employed worker usually provides his or her own tools
If you employed a household employee in 2018, you probably
and offers services to the general public in an independent
have to pay contributions to your state unemployment fund for
business.
2018. To find out if you do, contact your state unemployment
Example. You made an agreement with Paul Brown to care
tax agency. For a list of state unemployment tax agencies, go to
for your lawn. Paul runs a lawn care business and offers his
the U.S. Department of Labor's website at
oui.doleta.gov/
services to the general public. He hires his own helpers, in-
unemploy/agencies.asp. You should also find out if you need to
structs them how to do their jobs, and provides his own tools
pay or collect other state employment taxes or carry workers'
and supplies. Neither Paul nor his helpers are your employees.
compensation insurance.
For more information, see Pub. 926.
Who Needs To File Form W-2 and
When and Where To File
Form W-3?
Schedule H
You must file Form W-2 for each household employee to
whom you paid $2,100 or more of cash wages in 2018 that are
If you file Form 1040, 1040NR, 1040-SS, or 1041 for 2018, re-
subject to social security and Medicare taxes. To find out if the
member to attach Schedule H to it. Mail your return, by April
wages are subject to these taxes, see the instructions for Sched-
15, 2019 (April 17, 2019, if you live in Maine or Massachu-
ule H, lines 1, 3, and 5, later. Even if the wages aren't subject to
setts), to the address shown in your tax return instructions.
these taxes, if you withheld federal income tax from the wages
Exceptions. If you get an extension of time to file your return,
of any household employee, you must file Form W-2 for that
file your return with Schedule H by the extended due date. If
employee. However, when not subject to social security and
you’re a fiscal year filer, file your return and Schedule H by the
Medicare taxes, leave boxes 3, 4, 5, and 6 blank on Form W-2;
due date of your fiscal year return, including extensions.
only complete boxes 1 and 2. If the wages are below $2,100 for
2018 and you complete boxes 3, 4, 5, and 6 on Form W-2, the
If you’re a calendar year taxpayer and have no house-
SSA will reject your Form W-2.
hold employees for 2018, you don't have to file Sched-
TIP
ule H for 2018.
If you file one or more Forms W-2, you must also file Form
W-3. If filing electronically via the SSA's Form W-2 Online
If you’re not required to file a 2018 tax return (for example,
service, the SSA generates Form W-3 automatically based on
because your income is below the amount that requires you to
your Form(s) W-2. For more information on electronic filing,
file), you must file Schedule H by itself by April 15, 2019
go to the SSA's Employer W-2 Filing Instructions & Informa-
(April 17, 2019, if you live in Maine or Massachusetts). Com-
tion website at SSA.gov/employer.
plete Schedule H and put it in an envelope with your check or
Do You Have an Employer
money order. Don't send cash. See the list of
filing addresses
later in these instructions. Mail your completed Schedule H and
Identification Number (EIN)?
payment to the address listed for the place where you live.
If you have household employees, you will need an EIN to file
Make your check or money order payable to “United States
Schedule H. If you don't have an EIN, you may apply for one
Treasury” for the total household employment taxes due. Enter
online by going to IRS.gov/EIN. You may also apply for an
your name, address, SSN, daytime phone number, and “2018
EIN by faxing or mailing Form SS-4 to the IRS. Don't use a so-
Schedule H” on your check or money order. Household em-
cial security number (SSN) in place of an EIN. The Instruc-
ployers that are tax exempt and don't have to file a tax return
tions for Form SS-4 explain how you can get an EIN immedi-
(for example, churches that pay a household worker to take
ately over the Internet, generally within 4 business days by fax,
care of a minister's home) may also file Schedule H by itself.
H-3
Form W-2 and Form W-3
Line A. To figure the total cash wages you paid in 2018 to
each household employee, don't include amounts paid to any of
You're encouraged to file your Forms W-2 and W-3 electroni-
the following individuals.
cally. Go to the SSA's Employer W-2 Filing Instructions & In-
Your spouse.
formation website at
SSA.gov/employer
to learn about electron-
Your child who was under age 21.
ic filing. If filing electronically via the SSA's Form W-2 Online
Your parent. (See
Exception for parents
below.)
service, the SSA generates Form W-3 automatically based on
Your employee who was under age 18 at any time during
your Form(s) W-2.
2018. If the employee wasn't a student, see
Exception for em-
By January 31, 2019, send Copy A of all Forms W-2 with
ployees under age 18
below.
Form W-3 to the SSA and give Copies B, C, and 2 of Form
Exception for parents. Include the cash wages you paid
W-2 to each employee. For paper forms, you will meet this re-
your parent for work in or around your home if both (1) and (2)
quirement if the form is properly addressed, mailed, and post-
below apply.
marked no later than January 31, 2019.
1. Your child (including an adopted child or stepchild) who
If you file Forms W-2 and W-3 electronically, don't
lived with you was under age 18 or had a physical or mental
!
mail the paper Forms W-2 and W-3 to the SSA.
condition that required the personal care of an adult for at least
CAUTION
4 continuous weeks during the calendar quarter in which serv-
If filing on paper, mail Copy A of all Forms W-2 with Form
ices were performed. A calendar quarter is January through
W-3 to:
March, April through June, July through September, or Octo-
ber through December.
Social Security Administration
2. You were divorced and not remarried, a widow or wid-
Direct Operations Center
ower, or married to and living with a person whose physical or
Wilkes-Barre, PA 18769-0001
mental condition prevented him or her from caring for the child
for at least 4 continuous weeks during the calendar quarter in
which services were performed.
If you use “Certified Mail” to file, change the ZIP code to
“18769-0002.” If you use an IRS-approved private delivery
Exception for employees under age 18. Include the cash
service (PDS), add “Attn: W-2 Process, 1150 E. Mountain Dr.”
wages you paid to a person who was under age 18 and not a
to the address and change the ZIP code to “18702-7997.” Go to
student if providing household services was his or her principal
IRS.gov/PDS
for the current list of IRS-approved PDSs.
occupation.
Cash wages. Cash wages include wages paid by check, money
Check with your state, city, or local tax department to
order, etc. Cash wages don't include the value of food, lodging,
find out if you must file Copy 1 of Form W-2.
TIP
clothing, transit passes, or other noncash items you give a
household employee. However, cash you give your employee
Penalties. You may have to pay a penalty if you don't give
in place of these items is included in cash wages.
Forms W-2 to your employees or file Copy A of the forms with
Noncash wages paid to household employees aren't subject
the SSA by the due dates. You may also have to pay a penalty
to social security taxes or Medicare taxes; however, they are
if you don't show your employee's SSN on Form W-2 or don't
subject to federal income tax unless a specific exclusion ap-
provide correct information on the form.
plies. Report the value of taxable noncash wages in box 1 of
Form W-2 together with cash wages. Don't show noncash wa-
How To Fill In Schedule H, Form
ges in box 3 or in box 5 of Form W-2. See section 5 of Pub. 15
for more information on cash and noncash wages, and Pub.
W-2, and Form W-3
15-B for more information on fringe benefits.
Transportation (commuting) benefits. If you reimburse
Schedule H
your employee for qualified parking, transportation in a com-
muter highway vehicle, or transit passes, you may be able to
If you were notified that your household employee re-
exclude the cash reimbursement amounts from counting as
!
ceived payments from a state disability plan, see
State
cash wages subject to social security and Medicare taxes.
Disability
Payments, later.
CAUTION
Qualified parking is parking at or near your home or at or near
a location from which your employee commutes to your home.
Social security number (SSN). Enter your SSN. Form 1041
It doesn't include parking at or near your employee's home. For
filers, don't enter a number in this space. But be sure to enter
2018, you can reimburse your employee up to $260 per month
your EIN in the space provided.
for qualified parking and $260 per month for combined com-
Employer identification number (EIN). An EIN is a
muter highway vehicle transportation and transit passes. See
nine-digit number assigned by the IRS. The digits are arranged
Transportation (Commuting) Benefits in Pub. 15-B for more
as follows: 00-0000000. Enter your EIN in the space provided.
information. Any cash reimbursement over these amounts is in-
If you don't have an EIN, see
Do You Have an Employer Iden-
cluded as wages.
tification Number
(EIN), earlier. If you applied for an EIN but
haven't received it, enter “Applied For” and the date you ap-
plied. Don't use your SSN as an EIN.
H-4
Part I. Social Security, Medicare, and
Line 5. Enter on line 5 the total cash wages (see
Cash
wages,
Federal Income Taxes
earlier) paid to each employee in 2018 that exceeded $200,000.
Line 6. Multiply the amount on line 5 by 0.9% (0.009) and en-
Social security and Medicare taxes fund retirement, survivor,
ter the result on line 6.
disability, and health benefits for workers and their families.
You and your employees generally pay these taxes in equal
Line 7. Enter on line 7 any federal income tax you withheld
amounts.
from the wages you paid to your household employees in 2018.
See Pub. 926 and Pub. 15 for information on withholding fed-
You’re not required to withhold federal income tax from
eral income taxes.
wages you pay a household employee. You should withhold
Line 8. Add lines 2, 4, 6, and 7 and enter the result on line 8.
federal income tax only if your household employee asks you
Line 9. Review the cash wages you paid to all your household
to withhold it and you agree. The employee must give you a
employees for each calendar quarter of 2017 and 2018. Is the
completed Form W-4, Employee's Withholding Allowance
total for any quarter in 2017 or 2018 $1,000 or more?
Certificate.
Yes. Complete Schedule H, Part II.
For 2018, the social security tax rate is 6.2% each for you
No. Follow the instructions in the chart below.
and your employee. The Medicare tax rate is 1.45% each. The
limit on wages subject to social security tax is $128,400. There
IF you file
THEN enter the amount from
is no limit on wages subject to the Medicare tax. If you didn't
Form. . .
Schedule H, line 8, on. . .
deduct the employee's share from his or her wages, you must
1040
Schedule 4 (Form 1040), line 60a.
pay the employee's share of tax and your share of tax, a total of
12.4% for social security and 2.9% for Medicare tax. See
Form
1040NR
line 59a.
W-2 and Form
W-3, later, for more information.
1040-SS
Part I, line 4.
In addition to withholding Medicare tax at 1.45%, you must
1041
Schedule G, line 6.
withhold a 0.9% Additional Medicare Tax from wages you pay
to an employee in excess of $200,000 in a calendar year.
If you don't file any of the above forms, complete Schedule H,
You’re required to begin withholding Additional Medicare Tax
Part IV, and follow the instructions under
When and Where To
in the pay period in which you pay wages in excess of
File, earlier.
$200,000 to an employee and continue to withhold it each pay
Part II. Federal Unemployment (FUTA) Tax
period until the end of the calendar year. Additional Medicare
Tax is only imposed on the employee. There is no employer
FUTA tax, with state unemployment systems, provides for pay-
share of Additional Medicare Tax. All wages that are subject to
ments of unemployment compensation to workers who have
Medicare tax are subject to Additional Medicare Tax withhold-
lost their jobs. Most employers pay both a federal and state un-
ing if paid in excess of the $200,000 withholding threshold.
employment tax.
For more information on Additional Medicare Tax, go to
The FUTA tax rate is 6.0% (0.060). But see
Credit for con-
IRS.gov/ADMT.
tributions paid to state
next. Don't collect or deduct the FUTA
tax from your employee's wages. You must pay it from your
$2,100 test. If you pay a household employee $2,100 or
own funds.
more in cash wages during 2018, you must report and pay so-
cial security and Medicare taxes on all the wages, including the
Credit for contributions paid to state. You may be able to
first $2,100 paid to that employee. The test applies to cash wa-
take a credit of up to 5.4% (0.054) against the FUTA tax, re-
ges paid in 2018 regardless of when the wages were earned.
sulting in a net FUTA tax rate of 0.6% (0.006). But to do so,
See Pub. 926 for more information. Or, go to the SSA's website
you must pay all the required contributions for 2018 to your
at SSA.gov/pubs/EN-05-10021.pdf.
state unemployment fund by April 15, 2019 (April 17, 2019, if
you live in Maine or Massachusetts). Fiscal year filers must
Line 1. Enter on line 1 the total of cash wages (see
Cash wa-
pay all required contributions for 2018 by the due date of their
ges, earlier) paid in 2018 to each household employee who
federal income tax returns (not including extensions).
meets the
$2,100
test, explained earlier.
State unemployment taxes are sometimes called “contribu-
If you paid any household employee cash wages of
tions." Contributions are payments that a state requires you, as
!
more than $128,400 in 2018, include on line 1 only
an employer, to make to its unemployment fund for the pay-
the first $128,400 of that employee's cash wages.
CAUTION
ment of unemployment benefits. However, contributions don't
include:
Line 2. Multiply the amount on line 1 by 12.4% (0.124) and
Any payments deducted or deductible from your employ-
enter the result on line 2.
ees' pay;
Line 3. Enter on line 3 the total of cash wages (see
Cash wa-
Penalties, interest, or special administrative taxes; or
ges, earlier) paid in 2018 to each employee who meets the
Voluntary contributions you paid to get a lower state ex-
$2,100
test, explained earlier. There is no limit on wages sub-
perience rate.
ject to the Medicare tax.
If you paid contributions to any credit reduction state, see
Line 4. Multiply the amount on line 3 by 2.9% (0.029) and en-
the instructions for
line
23, later.
ter the result on line 4.
H-5

Download Instructions for IRS Form 1040 Schedule H - Household Employment Taxes 2018

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