How to File Schedule H: A Step-by-Step Guide

What Is Schedule H?

Schedule H (Form 1040) is the IRS form that household employers use to report and pay employment taxes on wages paid to domestic workers. If you paid a nanny, housekeeper, or other household employee $2,800 or more in 2026, you must file Schedule H with your personal income tax return.

Unlike regular employers who file quarterly Form 941, household employers consolidate everything into a single annual filing through Schedule H. This simplifies compliance but also means you need to keep accurate records throughout the year.

Who Needs to File Schedule H?

You must file Schedule H if any of the following apply during the tax year:

• You paid any single household employee cash wages of $2,800 or more.
• You withheld federal income tax (at the employee's request) for any household employee.
• You paid total cash wages of $1,000 or more in any calendar quarter to all household employees combined (triggering FUTA).

The Three Parts of Schedule H

Part I: Social Security, Medicare, and Income Tax

In Part I, you calculate the Social Security and Medicare taxes owed on your household employee's wages. You report the total cash wages paid, then apply the combined employer and employee FICA rate of 15.3%. If you also withheld federal income tax at your employee's request, report that amount here as well.

Part II: Federal Unemployment Tax (FUTA)

Part II covers your FUTA obligation. Report the total wages subject to FUTA (the first $7,000 per employee), apply the 6.0% rate, and then subtract the credit for state unemployment taxes you paid. In most cases, this credit reduces your effective FUTA rate to 0.6%.

If you paid state unemployment tax late or your state has an outstanding federal loan, the credit may be reduced. Check IRS Publication 926 for details on credit reduction states.

Part III: Total Household Employment Taxes

Part III sums your totals from Parts I and II. The final amount is transferred to your Form 1040 (Schedule 2, line 9). This increases your total tax liability, which is offset by any estimated payments you made during the year.

Key Deadlines

• January 31: Provide Form W-2 to your employee and file Copy A with the SSA.
• April 15: File your Form 1040 with Schedule H attached and pay any remaining tax balance.
• Quarterly: If your total nanny tax liability exceeds $1,000 for the year, you should make estimated tax payments or increase withholding at your regular job to avoid an underpayment penalty.

Tips for a Smooth Filing

1. Keep a payroll log all year. Track each pay period's gross wages, withholdings, and net pay. NannyLedger does this automatically.
2. Save your EIN confirmation. You need your Employer Identification Number for Schedule H and the W-2.
3. Do not forget state filings. Schedule H only covers federal taxes. Most states require separate unemployment and withholding filings.
4. Consider increasing your W-4 withholding. Instead of making quarterly estimated payments, many household employers adjust withholding at their regular job to cover the additional nanny tax liability.

File With Confidence Using NannyLedger

NannyLedger tracks every pay period, calculates withholdings in real time, and provides a year-end summary that maps directly to Schedule H line items. When tax season arrives, you will have everything you need to file accurately and on time.