IRS Schedule H Instructions 2026: Line-by-Line Guide

Schedule H is the form where you report your household employment taxes. If you paid a nanny, housekeeper, or other household employee $3,000 or more in 2026, this is the form that calculates how much you owe.

It looks intimidating at first—three parts, over 20 lines, tax calculations. But once you understand what each section does, it's actually pretty straightforward. Most household employers can complete it in about 30 minutes.

This guide walks you through every line, with real examples and exact calculations.

What Is Schedule H?

According to IRS Publication 926 (Household Employer's Tax Guide), Schedule H is where household employers report and pay:

• Social Security taxes (12.4% total: 6.2% employer + 6.2% employee)
• Medicare taxes (2.9% total: 1.45% employer + 1.45% employee)
• Federal Unemployment Tax (FUTA) (0.6% effective rate on first $7,000)
• Federal income tax withheld (if your employee requested it)

The form has three parts:

• Part I: Social Security, Medicare, and Income Taxes
• Part II: Federal Unemployment (FUTA) Tax
• Part III: Total Household Employment Taxes

You'll file Schedule H with your personal Form 1040. It cannot be filed separately or with a business return.

Before You Start: What You'll Need

Gather these items before you begin:

From your records:

• Total wages paid to each household employee in 2026
• Social Security and Medicare taxes withheld from employee paychecks
• Federal income tax withheld (if any)
• Your EIN (Employer Identification Number)

From your state:

• State unemployment tax (SUTA) amount paid
• State unemployment tax rate
• State wage base (varies by state)

If you're unsure about any amounts:

• Bank statements showing payroll payments
• Pay stubs or payroll records
• State unemployment tax statements (quarterly or annual)

Using NannyKeeper? All these numbers are calculated for you in your year-end summary. Just log in and export your Schedule H worksheet.

Part I: Social Security, Medicare, and Income Taxes

This is the largest section—it's where you report FICA taxes (Social Security and Medicare) and any federal income tax withheld.

Line 1: Total Cash Wages

What to enter: Total wages paid to ALL household employees in 2026.

This includes:

• Regular wages
• Overtime pay
• Bonuses
• Holiday pay
• Sick pay (if you provide it)

Do NOT include:

• Non-cash compensation (room, board, meals, transit passes)
• Wages paid to employees under 18 who are students (unless household work is their principal occupation)
• Wages to your spouse
• Wages to your child under age 21
• Wages to your parent (with limited exceptions)

Example: You paid your nanny $42,000 in 2026 (including a $1,000 holiday bonus). Enter $42,000.

Line 2: Social Security Tax Wages

What to enter: Wages subject to Social Security tax, which is the lesser of:

• Line 1, or
• $184,500 (the 2026 Social Security wage base)

For nearly all household employers, this equals Line 1. The $184,500 cap only matters if you paid an employee more than that amount in a single year—extremely rare for household employment.

Example: If Line 1 is $42,000, enter $42,000 (since it's well under $184,500).

Line 3: Social Security Tax

Calculation: Line 2 × 12.4%

This 12.4% represents the combined Social Security tax—your 6.2% employer share plus your employee's 6.2% share.

Why do you report both shares? Because Schedule H captures the total Social Security obligation. The employee's share was (or should have been) withheld from their paychecks throughout the year.

Example: $42,000 × 0.124 = $5,208

Line 4: Medicare Tax Wages

What to enter: Total wages subject to Medicare tax.

Unlike Social Security, Medicare has no wage cap. All wages are subject to Medicare tax, so this typically equals Line 1.

Example: Enter $42,000.

Line 5: Medicare Tax

Calculation: Line 4 × 2.9%

This 2.9% is the combined Medicare tax (your 1.45% + employee's 1.45%).

Example: $42,000 × 0.029 = $1,218

Line 6: Additional Medicare Tax

What to enter: If any single employee earned more than $200,000 from you, you must withhold an additional 0.9% Medicare tax on wages above $200,000.

The additional 0.9% is only paid by the employee—there's no employer match. But as the employer, you're responsible for withholding it.

For most household employers: Enter $0. Very few household employees earn over $200,000 from a single family.

Line 7: Total Social Security and Medicare Taxes

Calculation: Line 3 + Line 5 + Line 6

This is your total FICA obligation for the year.

Example: $5,208 + $1,218 + $0 = $6,426

Line 8: Federal Income Tax Withheld

What to enter: Federal income tax you withheld from your employee's wages (if any).

Important: Federal income tax withholding is optional for household employers. Unlike regular employers, you're not required to withhold federal income tax unless your employee specifically requests it by submitting a W-4.

Many families don't withhold federal income tax. The employee pays it themselves when they file their personal return.

Example:

• If you didn't withhold: Enter $0
• If you withheld $2,500 at employee's request: Enter $2,500

Line 9: Total Social Security, Medicare, and Income Taxes

Calculation: Line 7 + Line 8

Example: $6,426 + $0 = $6,426

Part II: Federal Unemployment (FUTA) Tax

FUTA funds federal unemployment insurance. This is entirely your responsibility as the employer—nothing is withheld from your employee's pay.

Line 10: Did You Pay State Unemployment Contributions?

Checkbox question: Did you pay unemployment contributions to a state unemployment fund?

If yes: Check the "Yes" box and continue to Lines 11-17. If no: Check the "No" box and skip to Line 18 (very rare—almost every state has unemployment insurance).

Most employers: Check Yes.

Line 11: Name of State

What to enter: The two-letter abbreviation for the state where your employee works. This is typically your home state.

If your employee works in multiple states, enter the primary state. If you have employees in different states, you may need to complete multiple sets of Lines 11-17.

Example: Enter CA for California.

Line 12: State Contributions Paid

What to enter: Total state unemployment taxes (SUTA) you paid for 2026.

This should match your state unemployment agency records. Most states require quarterly payments, so add up all four quarters.

Example: You paid California EDD a total of $420 for unemployment insurance. Enter $420.

Note: State unemployment tax rates vary by state and by employer. New employers typically pay a default rate (around 2.5-3.5% in most states), while experienced employers may have higher or lower rates based on their unemployment claims history.

Line 13: State Experience Rate or Credit

What to enter: Your assigned state unemployment tax rate (expressed as a decimal).

This rate is assigned by your state when you register as an employer. New employers receive a default rate; after a few years, your rate adjusts based on whether former employees filed unemployment claims.

Example: If California assigned you a 3.4% rate, enter 0.034.

Line 14: FUTA Wages

What to enter: Wages subject to FUTA, which is the first $7,000 paid to each employee.

The federal unemployment wage base is $7,000. Any wages above this aren't subject to FUTA.

Example: If you paid $42,000, enter $7,000 (the FUTA cap).

Line 15: FUTA Tax

Calculation: Line 14 × 6.0%

The nominal FUTA rate is 6.0%, but you'll get a credit for paying state unemployment taxes (calculated in Lines 16-17), reducing the effective rate.

Example: $7,000 × 0.06 = $420

Line 16: Maximum Credit

Calculation: Line 14 × 5.4%

You're entitled to a credit against FUTA for state unemployment taxes you paid. The maximum credit is 5.4% of FUTA wages.

Example: $7,000 × 0.054 = $378

Line 17: Net FUTA Tax

Calculation: Line 15 minus the smaller of Line 12 or Line 16.

Here's the key: You get a credit for state unemployment taxes paid, but the credit can't exceed 5.4% of wages ($378 in our example).

• If you paid $420 or more in SUTA: Your credit is $378 (the maximum)
• If you paid less than $378 in SUTA: Your credit is limited to what you paid

Example with full credit:

• Line 15 (FUTA before credit): $420
• Line 12 (State taxes paid): $420
• Line 16 (Max credit): $378
• Credit = smaller of $420 or $378 = $378
• Net FUTA = $420 - $378 = $42

Example with limited credit:

• If you only paid $250 in SUTA
• Credit = smaller of $250 or $378 = $250
• Net FUTA = $420 - $250 = $170

The standard result for most household employers who paid their full SUTA is $42 in FUTA tax per employee.

Part III: Total Household Employment Taxes

This section adds everything up and calculates what you owe.

Line 18: Total Social Security, Medicare, Income, and FUTA Taxes

Calculation: Line 9 + Line 17

Example: $6,426 + $42 = $6,468

Line 19: Reserved for Future Use

This line is currently not used. Leave it blank or enter $0.

Line 20: Total Household Employment Taxes

Calculation: Line 18 - Line 19

For most people, this equals Line 18.

Example: $6,468 - $0 = $6,468

Lines 21-25: Adjustments and Credits

These lines handle various adjustments. Most household employers won't use them:

• Line 21: COVID-related credits (expired)
• Line 22: COVID-related credits (expired)
• Line 23: Total refundable credits
• Line 24: Net tax after credits
• Line 25: Additional credits

For most 2026 filers: Skip these or enter $0.

Line 26: Amount You Owe

What this represents: This is the total household employment tax that flows to your Form 1040.

If you made no estimated payments during the year, this is what you'll pay when you file your taxes.

Example: $6,468

Complete Example: The Garcia Family

Let's walk through a complete Schedule H for a typical household employer.

Their situation:

• Nanny paid $42,000 in 2026
• Withheld $3,213 in FICA from employee's paychecks (7.65%)
• No federal income tax withheld (employee didn't request it)
• Paid $420 in California SUTA (3.4% × $7,000 wage base, plus ETT and SDI components)
• Made no estimated payments during the year

Their completed Schedule H:

What they actually pay:

The $6,468 on Line 26 is the total tax obligation. But part of this was already covered:

• $3,213 was withheld from the nanny's paychecks (the employee's 7.65% share)
• $3,255 is the employer's share

The employer's out-of-pocket for Schedule H is $3,255—but they also owe the employee's withheld amount to the IRS, for a total payment of $6,468 due with their tax return.

The math:

• Employee's share (withheld from paychecks): $42,000 × 7.65% = $3,213
• Employer's FICA share: $42,000 × 7.65% = $3,213
• Employer's FUTA: $42
• Total: $3,213 + $3,213 + $42 = $6,468 ✓

Common Schedule H Errors

Error 1: Using Gross Pay Instead of Cash Wages

The mistake: Including the value of room, board, or other non-cash compensation.

The fix: Only include actual cash wages on Line 1. If you provided free rent worth $1,000/month, don't add $12,000 to wages.

Error 2: Forgetting FUTA

The mistake: Skipping Part II because "it's only $42."

The fix: You must complete Part II even though the amount is small. Leaving it blank is an incomplete return.

Error 3: Wrong Wage Base for Social Security

The mistake: Capping Social Security wages at the state unemployment wage base ($7,000-$15,000 depending on state).

The fix: Social Security wage base for 2026 is $184,500—much higher than state unemployment limits. For household employers, this cap almost never applies. Use total wages on Line 2.

Error 4: Confusion About Who Pays What

The mistake: Thinking the employee's 7.65% FICA withholding is separate from Schedule H.

The fix: Schedule H captures the total 15.3% FICA (employer + employee shares). The employee's share should have been withheld from paychecks. When you pay the $6,468 in our example, you're paying both your share and remitting what you withheld from your employee.

Error 5: Not Checking the Household Employment Box on Form 1040

The mistake: Filing Schedule H without checking the household employment indicator on your 1040.

The fix: On Form 1040, Schedule 2, there's a checkbox indicating you have household employment taxes. Make sure it's checked, and the amount from Schedule H Line 26 flows correctly to your 1040.

Error 6: Missing the Filing Requirement

The mistake: Thinking you don't need to file because wages were below some other threshold.

The fix: If you paid $3,000 or more to any single household employee in 2026, you must file Schedule H. (The threshold for 2025 was $2,800.) Also, if you withheld federal income tax at your employee's request, you must file regardless of the wage amount.

Error 7: Applying the Wrong Year's Form

The mistake: Using a 2025 or earlier Schedule H for 2026 taxes.

The fix: Always download the current year's form from IRS.gov. Tax rates, thresholds, and line numbers can change between years.

Using Tax Software

All major tax software handles Schedule H. Here's where to find it:

TurboTax:

1. Go to "Other Tax Situations"
2. Select "Household Employment Taxes"
3. Answer the guided questions about wages paid

H&R Block:

1. Navigate to "Other Income"
2. Choose "Wages Paid to Household Employees"
3. Enter your wage and withholding information

FreeTaxUSA:

1. Go to "Other Taxes"
2. Select "Household Employment Taxes"
3. Complete the Schedule H section

TaxAct:

1. Find "Miscellaneous Taxes"
2. Select "Household Employment Taxes (Schedule H)"
3. Follow the prompts

The software asks the same questions as the paper form but does all the calculations automatically. Just have your wage totals, withholding amounts, and SUTA information ready.

Payment Options

When you file your return with Schedule H, you have several payment options:

Option 1: Pay with your tax return Include the Schedule H tax in your total payment when you file. This is the simplest approach.

Option 2: Quarterly estimated payments Make quarterly payments using IRS Form 1040-ES. Due dates: April 15, June 15, September 15, January 15.

Option 3: Increase your W-4 withholding If you have a regular job, increase your withholding on your W-4 to cover household employment taxes. Many families find this easier than quarterly payments.

Option 4: IRS payment plan If you can't pay the full amount, apply for an installment agreement. You'll pay interest, but you'll avoid more serious collection actions.

When to Get Professional Help

Consider hiring a tax professional if:

• You have multiple household employees — Separate calculations for each employee
• Your employee earned over $200,000 — Additional Medicare tax applies
• You're in a complex state — California, New York, and New Jersey have additional requirements
• You made errors in previous years — May need to file amended returns
• Your employee worked in multiple states — Multi-state SUTA and FUTA calculations
• You're unsure about any amounts — Better to get it right than fix it later

Cost expectation: A CPA or Enrolled Agent typically charges $100-$300 to prepare Schedule H as part of your return. Standalone Schedule H preparation is less common.

Frequently Asked Questions

Do I need to file Schedule H if I paid under the threshold? If you paid less than $3,000 to a household employee in 2026, you generally don't need to file Schedule H. However, if you withheld federal income tax at your employee's request, you must file regardless of the wage amount.

Can I file Schedule H separately from my 1040? No. Schedule H must be attached to your personal tax return (Form 1040). You can't file it separately or with a business return.

What if I have multiple household employees? Add all their wages together on Schedule H. You'll report combined totals for Social Security and Medicare. For FUTA, calculate separately for each employee (each gets the $7,000 wage base), then add them together.

Do I need to make quarterly payments? Not necessarily. You have two options: (1) make quarterly estimated tax payments using Form 1040-ES, or (2) increase your W-4 withholding at your job to cover the additional taxes. Most families find option 2 easier—no separate payments to track.

What if I made a mistake on a previous Schedule H? File Form 1040-X (amended return) with a corrected Schedule H attached. The IRS generally allows amendments within 3 years of the original filing date.

Is Schedule H the same as Form 941? No. Form 941 is for regular businesses with non-household employees who file quarterly. As a household employer, you file Schedule H annually with your personal tax return, not Form 941.

What's the penalty for filing Schedule H late? Late filing penalties are typically 5% of unpaid taxes per month, up to 25% maximum. Late payment penalties add another 0.5% per month. Interest accrues from the original due date. Learn more about penalties →

Summary: The Quick Version

1. Part I (Lines 1-9): Calculate FICA taxes

   • Social Security: 12.4% of wages (capped at $184,500)
   • Medicare: 2.9% of all wages
   • Plus any federal income tax withheld

2. Part II (Lines 10-17): Calculate FUTA tax

   • 6.0% on first $7,000 of wages
   • Minus credit for state unemployment taxes paid
   • Usually nets to about $42 per employee

3. Part III (Lines 18-26): Add it up

   • Part I + Part II = Total household employment taxes
   • This amount flows to your Form 1040

4. Pay: Include with your tax return by April 15

Using NannyKeeper? We calculate all these numbers for you automatically. Just export your year-end summary and enter the numbers into your tax software—or hand it to your accountant.