Instructions for Schedule H (Form 1040), Household Employment Taxes - How To Fill In Schedule H, Form W-2, and Form W-3

Instructions for Schedule H (Form 1040)

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If you were notified that your household employee received payments from a state disability plan, see State Disability Payments.

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Enter your social security number. (Form 1041 filers, do not enter a number in this space. But be sure to enter your EIN in the space provided.)

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An EIN is a nine-digit number assigned by the IRS. The digits are arranged as follows: 00-0000000. Enter your EIN in the space provided. If you do not have an EIN, see Do You Have an Employer Identification Number (EIN)? earlier. If you applied for an EIN but have not received it, enter Applied For and the date you applied. Do not use your social security number as an EIN.

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To figure the total cash wages you paid in 2011 to each household employee, do not count amounts paid to any of the following individuals.

Your spouse.
Your child who was under age 21.
Your parent. (See Exception for parents below.)
Your employee who was under age 18 at any time during 2011. If the employee was not a student, see Exception for employees under age 18 below.

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Count the cash wages you paid your parent for work in or around your home if both 1 and 2 below apply.

Your child who lived with you was under age 18 or had a physical or mental condition that required the personal care of an adult for at least 4 continuous weeks during the calendar quarter in which services were performed. A calendar quarter is January through March, April through June, July through September, or October through December.
You were divorced and not remarried, a widow or widower, or married to and living with a person whose physical or mental condition prevented him or her from caring for the child during that 4-week period.

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Count the cash wages you paid to a person who was under age 18 and not a student if providing household services was his or her principal occupation.

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Cash wages include wages paid by check, money order, etc. Cash wages do not include the value of food, lodging, clothing or other noncash items you give a household employee. See Wages in Pub. 926.

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For 2011, you can generally give your employee transportation benefits such as transit passes worth up to $230 per month without the benefits counting as cash. However, the value of benefits over $230 a month is included as wages. (See Transportation (Commuting) Benefits in Pub. 15-B, Employer's Tax Guide to Fringe Benefits, for more information.)

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Social security and Medicare taxes fund retirement, survivor, disability, and health benefits for workers and their families. You and your employees generally pay these taxes in equal amounts.

For social security, the tax rate is 6.2% for you and 4.2% for your employee. For Medicare, the tax rate is 1.45% each. For 2011, the limit on wages subject to social security tax is $106,800. There is no limit on wages subject to the Medicare tax. If you did not deduct the employee's share from his or her wages, you must pay the employee's share and your share (a total of 10.4% for social security and 2.9% for Medicare tax) of tax. See Form W-2 and Form W-3 in these instructions for more information.

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If you pay a household employee $1,700 or more in cash wages during 2011, you must report and pay social security and Medicare taxes on all the wages. The test applies to cash wages paid in 2011 regardless of when the wages were earned. See Pub. 926 for more information. Or, visit the website for Social Security at www.socialsecurity.gov/pubs/10021.html.

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Enter on line 1 the total of cash wages (see Cash wages above) paid in 2011 to each household employee who meets the $1,700 test, explained above.

If you paid any household employee cash wages of more than $106,800 in 2011, include on line 1 only the first $106,800 of that employee's cash wages.

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Multiply the amount on line 1 by 10.4% (.104) and enter the result on line 2.

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Enter on line 3 the total of cash wages (see Cash wages earlier) paid in 2011 to each employee who meets the $1,700 test. There is no limit on wages subject to the Medicare tax.

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Multiply the amount on line 3 by 2.9% (.029) and enter the result on line 4.

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Enter on line 5 any federal income tax you withheld from the wages you paid to your household employees in 2011. See Pub. 15 (Circular E), Employer's Tax Guide, for information on withholding federal income taxes.

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Add lines 2, 4, and 5 and enter the result on line 6.

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Review the cash wages you paid to all your household employees for each calendar quarter of 2010 and 2011. Is the total for any quarter in 2010 or 2011 $1,000 or more?

Yes. Complete Part II of Schedule H.

No. Follow the instructions in the chart below.

If you file Form. . .	Then enter the amount from Schedule H, line 6, on. . .
1040	line 59a
1040NR	line 58
1040-SS	Part I, line 4
1041	Schedule G, line 6

If you do not file any of the above forms, complete Part IV of Schedule H and follow the instructions under When and Where To File.

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FUTA tax, with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a federal and state unemployment tax.

The FUTA tax rate is 6.2% (.062) before July 1 and 6.0% (.060) after June 30. But see Credit for contributions paid to state below. Do not deduct the FUTA tax from your employee's wages. You must pay it from your own funds. See these instructions for a listing of some helpful contact information for each state.

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You may be able to take a credit of up to 5.4% against the FUTA tax, resulting in a net FUTA tax rate of 0.8% (.008) before July 1 and 0.6% (.006) after June 30. But to do so, you must pay all the required contributions for 2011 to your state unemployment fund by April 17, 2012. Fiscal year filers must pay all required contributions for 2011 by the due date of their federal income tax returns (not including extensions).

Contributions are payments that a state requires you, as an employer, to make to its unemployment fund for the payment of unemployment benefits. However, contributions do not include:

Any payments deducted or deductible from your employees' pay;
Penalties, interest, or special administrative taxes not included in the contributions rate the state gave you; and
Voluntary contributions you paid to get a lower experience rate.

If you paid contributions to any credit reduction state, see the instructions for line 21.

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Answer the questions on lines 8 through 10 to see if you should complete Section A or Section B of Part II.

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If you paid all state unemployment contributions for 2011 by the due date of your return (not including extensions), check the Yes box on line 9. Check the No box if you did not pay all of your state contributions by the due date of your return.

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Enter the two-letter abbreviation of the name of the state (or the District of Columbia, Puerto Rico, or the U.S. Virgin Islands) to which you paid unemployment contributions.

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Enter the total of contributions (defined earlier) you paid to your state unemployment fund for 2011. If you did not have to make contributions because your state gave you a zero percent experience rate, enter 0% rate on line 12.

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Enter the total of cash wages (see Cash wages in these instructions) you paid in 2011 to each household employee, includ ing employees paid less than $1,000. However, do not include cash wages paid in 2011 to any of the following individuals.

Your spouse.
Your child who was under age 21.
Your parent.

If you paid any household employee more than $7,000 in 2011, include on line 13 only the first $7,000 of that employee's cash wages.

Complete lines 15 through 22 only if you checked a No box on lines 8, 9, or 10.

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Complete the Worksheet for FUTA Tax—Line 14 in these instructions. Multiply the portion of the wages on line 13 paid before July 1, 2011, by .8% (.008). Multiply the portion of the wages on line 13 paid after June 30, 2011, by .6% (.006). Enter the sum of those two amounts on line 14.

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Complete all columns that apply. If you do not, you will not get a credit. If you need more space, attach a statement using the same format as line 15. Your state will provide the experience rate. If you do not know your rate, contact your state unemployment tax agency. See these instructions for a listing of some helpful contact information for each state.

You must complete columns (a), (b), and (h), even if you were not given an experience rate. If you were given an experience rate of 5.4% or higher, you must also complete columns (c) and (d). If you were given a rate of less than 5.4%, you must complete all columns.

If you were given a rate for only part of the year, or the rate changed during the year, you must complete a separate line for each rate period.

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Enter the taxable wages on which you must pay taxes to the unemployment fund of the state shown in column (a). If your experience rate is zero percent, enter the amount of wages you would have had to pay taxes on if that rate had not been granted.

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Enter the total of contributions (defined earlier) you paid to the state unemployment fund for 2011 by April 17, 2012. Fiscal year filers, enter the total contributions you paid to the state unemployment fund for 2011 by the due date of your return (not including extensions). If you are claiming excess credits as payments of state unemployment contributions, attach a copy of the letter from your state.

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Add the amounts in columns (g) and (h) separately and enter the totals in the spaces provided.

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Add the amounts shown on line 16 and enter the total on line 17.

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Complete the Worksheet for FUTA Tax—Line 19 in these instructions. Multiply the portion of the wages on line 18 paid before July 1, 2011, by 6.2% (.062). Multiply the portion of the wages on line 18 paid after June 30, 2011, by 6.0% (.060). Enter the sum of those two amounts on line 19.

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Complete the Worksheet for Household Employers in a Credit Reduction State—Line 21 in these instructions only if you are a household employer in any of the credit reduction states. A state is a credit reduction state if the amount in the Reduction rate column for the state in the worksheet is greater than zero.

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Worksheet for FUTA Tax—Line 14

Time Period	Line 13 Wages	Percentage	Sum
Before 7/1/2011		x .008
After 6/30/2011		x .006
ENTER RESULTS ON LINE 14		TOTAL

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Worksheet for FUTA Tax—Line 19

Time Period	Line 18 Wages	Percentage	Sum
Before 7/1/2011		x .062
After 6/30/2011		x .060
ENTER RESULTS ON LINE 19		TOTAL

State Names and Postal Abbreviations

State	Postal Abbreviation	State	Postal Abbreviation
Alabama	AL	Nebraska	NE
Alaska	AK	Nevada	NV
Arizona	AZ	New Hampshire	NH
Arkansas	AR	New Jersey	NJ
California	CA	New Mexico	NM
Colorado	CO	New York	NY
Connecticut	CT	North Carolina	NC
Delaware	DE	North Dakota	ND
District of Columbia	DC	Ohio	OH
Florida	FL	Oklahoma	OK
Georgia	GA	Oregon	OR
Hawaii	HI	Pennsylvania	PA
Idaho	ID	Rhode Island	RI
Illinois	IL	South Carolina	SC
Indiana	IN	South Dakota	SD
Iowa	IA	Tennessee	TN
Kansas	KS	Texas	TX
Kentucky	KY	Utah	UT
Louisiana	LA	Vermont	VT
Maine	ME	Virginia	VA
Maryland	MD	Washington	WA
Massachusetts	MA	West Virginia	WV
Michigan	MI	Wisconsin	WI
Minnesota	MN	Wyoming	WY
Mississippi	MS	Puerto Rico	PR
Missouri	MO	U.S. Virgin Islands	VI
Montana	MT

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Worksheet for Household Employers in a Credit Reduction State—Line 21

1. Enter the smaller of the amount from Schedule H, line 17 or line 20								1
2. Enter the total taxable FUTA wages from Schedule H, line 18								2
3. Check the box of every state in which you were required to pay state unemployment tax this year. If the credit reduction rate for a state is greater than zero, it is a credit reduction state. If all of the states you check have a credit reduction rate of zero, do not enter an amount on Line 21. For credit reduction states, enter the FUTA taxable wages paid in the state, multiply by the reduction rate, and then enter the credit reduction amount for that state. If any states do not apply to you, leave them blank.
✓	Postal Abbreviation	FUTA Taxable Wages	Reduction Rate	Credit Reduction	✓	Postal Abbreviation	FUTA Taxable Wages	Reduction Rate	Credit Reduction
	AK		x .000			NC		x .003
	AL		x .000			ND		x .000
	AR		x .003			NE		x .000
	AZ		x .000			NH		x .000
	CA		x .003			NJ		x .003
	CO		x .000			NM		x .000
	CT		x .003			NV		x .003
	DC		x .000			NY		x .003
	DE		x .000			OH		x .003
	FL		x .003			OK		x .000
	GA		x .003			OR		x .000
	HI		x .000			PA		x .003
	IA		x .000			RI		x .003
	ID		x .000			SC		x .000
	IL		x .003			SD		x .000
	IN		x .006			TN		x .000
	KS		x .000			TX		x .000
	KY		x .003			UT		x .000
	LA		x .000			VA		x .003
	MA		x .000			VT		x .000
	MD		x .000			WA		x .000
	ME		x .000			WI		x .003
	MI		x .009			WV		x .000
	MN		x .003			WY		x .000
	MO		x .003			PR		x .000
	MS		x .000			VI		x .003
	MT		x .000
4. Total Credit reduction								4
5. Subtract line 4 of this worksheet from line 1 of this worksheet and enter the result here and on Schedule H, line 21.								5

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Enter the amount from line 6. If there is no entry on line 6, enter -0-.

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Add the amounts on lines 14 and 23. If you were required to complete Section B of Part II, add the amounts on lines 22 and 23 and enter the total on line 24.

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Follow the instructions in the chart below.

If you file Form. . .	Then do not complete Part IV but enter the amount from Schedule H, line 24, on . . .
1040	line 59a
1040NR	line 58
1040-SS	Part I, line 4
1041	Schedule G, line 6

If you do not file any of the above forms, complete Part IV of Schedule H and follow the instructions under When and Where To File.

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You must complete this part if you were paid to prepare Schedule H, and are not an employee of the filing entity, and are not attaching Schedule H to Form 1040, 1040NR, 1040-SS, or Form 1041. You must sign in the space provided and give the filer a copy of the return in addition to the copy to be filed with the IRS.

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If you file one or more Forms W-2, you must also file Form W-3.

You must report both cash and noncash wages in box 1, as well as tips and other compensation. The completed Forms W-2 and W-3 in the example (in these instructions) show how the entries are made. For detailed information on preparing these forms, see the Instructions for Forms W-2 and W-3, Wage and Tax Statement and Transmittal of Wages and Tax Statements.

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If you paid all of your employee's share of social security and Medicare taxes, without deducting them from the employee, follow steps 1 through 3. (See the example in these instructions.)

Enter the amounts you paid on your employee's behalf in boxes 4 and 6 (do not include your share of these taxes).
Add the amounts in boxes 3, 4, and 6. (However, if box 5 is greater than box 3, then add the amounts in boxes 4, 5, and 6.)
Enter the total in box 1.

On Form W-3, put an X in the Hshld. emp. box located in box b, Kind of Payer.

For information on filing Forms W-2 and W-3 electronically, visit the website for Social Security, Business Services Online, at www.socialsecurity.gov/bso/bsowelcome.htm.

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How To Fill In Schedule H, Form W-2, and Form W-3(p3)

Schedule H(p3)

Social security number.(p3)

Employer identification number (EIN).(p3)

Line A.(p3)

Cash wages.(p4)

Part I. Social Security, Medicare, and Federal Income Taxes(p4)

Line 1.(p4)

Line 2.(p4)

Line 3.(p4)

Line 4.(p4)

Line 5.(p4)

Line 6.(p4)

Line 7.(p4)

Part II. Federal Unemployment (FUTA) Tax(p4)

Credit for contributions paid to state.(p4)

Lines 8 through 10.(p4)

Line 11.(p4)

Line 12.(p4)

Line 13.(p4)

Line 14.(p5)

Line 15.(p5)

Line 16.(p5)

Line 17.(p5)

Line 19.(p5)

Line 21.(p5)

Part III. Total Household Employment Taxes(p7)

Line 23.(p7)

Line 24.(p7)

Line 25.(p8)

Paid Preparers(p8)

Paid preparer use only.(p8)

Form W-2 and Form W-3(p8)

Employee's portion of taxes paid by employer.(p8)