Household Employment Taxes

The IRS usually considers you an employer of a person when both of these apply:

  • You hired the person to work in your home.
  • You have control over how the person performs the work.

These employees include:

  • Housekeepers
  • Maids
  • Nannies
  • Gardeners

As an employer, you might have to pay employment taxes — also known as the nanny tax. Employment taxes you might have to pay include:

  • Social Security tax
  • Medicare tax
  • Federal unemployment tax
  • State unemployment tax (varies by state)

Social Security and Medicare

If you pay a household employee cash wages of $1,900 or more in 2017, those cash wages are:

  • Social Security wages
  • Medicare wages

It doesn’t matter when the employee earned the wages. You’ll owe Social Security and Medicare taxes on all of those wages.

If you paid the employee less than $1,900 in cash wages in 2017, none of the wages are Social Security and Medicare wages. You won’t owe Social Security or Medicare tax on those wages.

The rules regarding payment of Social Security and Medicare taxes don’t apply to your:

  • Employees under age 18
  • Children under age 21
  • Spouse
  • Parents, in many cases

Federal unemployment tax (FUTA)

You might have paid household employees for cash wages of $1,000 or more in a calendar quarter of 2017 or the previous year. FUTA wages are the first $7,000 of cash wages paid to each household employee in 2017 and 2018.

Calendar quarters include:

  • January through March
  • April through June
  • July through September
  • October through December

If your employee’s cash wages reach $7,000 during the year, don’t figure FUTA tax on the wages you pay the employee for the rest of the year.

The cash wages you paid in 2017 might still be FUTA wages if both of these apply:

  • The cash wages paid are less than $1,000 in each calendar quarter of 2017.
  • You had a household employee in 2016.

They’re FUTA wages if the cash wages you paid to household employees in any calendar quarter of 2016 were $1,000 or more.

The rules regarding payment of federal unemployment tax don’t apply to your:

  • Children under age 21
  • Spouse
  • Parent

You’re not required to withhold federal income tax, but you can if your employee requests it.

You must file a separate W-2: Wage and Tax Statement for each household employee you pay either of these:

  • Social Security and Medicare wages of $1,900 or more for tax year 2017
  • Wages you withheld federal income tax from

You might need to file Schedule H with your individual return to report household employment taxes. Do this if, in 2017, you paid any of these:

  • Cash wages of $1,900 or more to any one household employee
  • FUTA wages — total cash wages of $1,000 or more in any calendar quarter to all household employees
  • Wages to household employees you withheld federal income tax from

If you have to file Schedule H or a W-2, you must have an employer identification number (EIN). You can get one by either:

  • Filing Form SS-4: Application for Employer Identification Number
  • Applying online at www.irs.gov

To learn more, see Publication 926: Household Employer’s Tax Guide at www.irs.gov.

Related Topics

Related Resources

I got married in September, but my spouse and I maintained separate households through Dec. 31. Can I be considered unma

Learn how to file your return if married and living separately from your spouse from the tax experts at H&R Block.

I have a question about childcare provider taxes. If I’m a childcare provider without a W-2, how do I file taxes for chi

If you are a child care provider without a W-2, how do you file your taxes? Learn more from the tax experts at H&R Block.

How do I calculate and file estimated taxes?

Need to know how to calculate estimated taxes? We're here to help. Get tax answers from H&R Block today.

Our divorce decree states that my ex-spouse can claim one of our children each year, yet I pay 100% of their support. Ca

Why should you follow your divorce decree when it comes to dependents? Learn how divorce may affect claiming dependents. Get tax answers at H&R Block.