Employment Taxes for Household Employees

What Forms Must You File?

You must file certain forms to report your household employee's wages and the federal employment taxes for the employee if you pay any of the following wages to the employee.

1. Social security and Medicare wages.
2. FUTA wages.
3. Wages from which you withhold federal income tax.
4. Florida SUTA wages.

The employment tax forms and instructions you need will be sent to you automatically in January 2000 if you reported employment taxes for 1998 on Schedule H (Form 1040), Household Employment Taxes. 

Employer identification number (EIN). You must include your employer identification number (EIN) on the forms you file for your household employee. An EIN is a 9-digit number issued by the IRS. It is not the same as a social security number.

You ordinarily will have an EIN if you previously paid taxes for employees, either as a household employer or in a business you own as a sole proprietor. If you already have an EIN, use that number.

If you do not have an EIN, get Form SS-4, Application for Employer Identification Number. The instructions for Form SS-4 explain how you can get an EIN immediately by telephone or in about 4 weeks if you apply by mail.

Form W-2. File a separate 1999 Form W-2, Wage and Tax Statement, for each household employee to whom you pay either of the following wages.

1. Social security and Medicare wages.
2. Wages from which you withhold federal income tax.

You must complete Form W-2 and give Copies B, C, and 2 to your employee by January 31, 2000. You must send Copy A of Form W-2 with Form W-3, Transmittal of Wage and Tax Statements, to the Social Security Administration by February 29, 2000.

Employee who leaves during the year. If an employee stops working for you before the end of 1999, you may file Form W-2 and provide copies to your employee immediately after you make your final payment of wages. You do not need to wait until 2000. If the employee asks you for Form W-2, give it to him or her within 30 days after the request or the last wage payment, whichever is later.

Schedule H. Use Schedule H (Form 1040), Household Employment Taxes, to report the federal employment taxes for your household employee if you pay any of the following wages to the employee.

1. Social security and Medicare wages.
2. FUTA wages.
3. Wages from which you withhold federal income tax.

File Schedule H with your 1999 federal income tax return by April 17, 2000. If you get an extension to file your return, the extension will also apply to your Schedule H.

Filing options when no return is required. If you are not required to file a 1999 tax return, you have the following two options.

1. You can file Schedule H by itself. See the Schedule H instructions for details.
2. If, besides your household employee, you have other employees for whom you report employment taxes on Form 941 or Form 943 and on Form 940 (or 940-EZ), you can include your taxes for your household employee on those forms. See Business employment tax returns, next.

Employers having the options listed above include certain tax-exempt organizations that do not have to file a tax return, such as churches that pay a household worker to take care of a minister's home.

Business employment tax returns. Do not use Schedule H (Form 1040) if you choose to pay the employment taxes for your household employee with business or farm employment taxes. Instead, include the social security, Medicare, and withheld federal income taxes for the employee on the Form 941, Employer's Quarterly Federal Tax Return, that you file for your business or on the Form 943, Employer's Annual Tax Return for Agricultural Employees, that you file for your farm. Include the FUTA tax for the employee on your Form 940 (or 940-EZ), Employer's Annual Federal Unemployment (FUTA) Tax Return.

If you report the employment taxes for your household employee on Form 941 or Form 943, file Form W-2 for that employee with the Forms W-2 and Form W-3 for your business or farm employees.

For information about paying taxes through federal income tax withholding and estimated tax payments and figuring the estimated tax penalty, order Publication 505, Tax Withholding and Estimated Tax.

For more information on household employees, order Publication 926, Household Employer's Guide, by calling the IRS at 1-800-829-3676.

Yes, just e-mail or phone. See the contact button for more information.

Also see:

        Employment Taxes For Household Employees

      Household Employees - Making Tax Payments

      Florida Unemployment Compensation Tax - Who Must Report Wages

© Copyright 1999 Raymond S. Kulzick. All rights reserved. 990105

This publication provides business, financial planning, and/or tax information to our clients. All material is for general information only and should not be acted upon without seeking appropriate professional assistance.