Household Employer's Tax Guide, Publication 926 (2023)

The Household Employer's Tax, also known as Publication 926, is a detailed guidebook from the IRS that helps people who hire household workers, like housekeepers or nannies, understand what they need to do for taxes. It walks them through the different tax responsibilities related to employing someone at home, providing clarity and guidance.

Who Qualifies as a Household Employer?

If you hire someone to work in or around your home and you control how the work is done, you qualify as a household employer. This includes individuals such as:

  • Babysitters,
  • Butlers,
  • Caretakers,
  • Cooks,
  • Domestic workers,
  • Drivers,
  • Health aides,
  • Housecleaning workers,
  • Housekeepers,
  • Maids,
  • Nannies,
  • Private nurses, and
  • Yard workers.

Do You Have to Pay Employment Taxes?

Yes, you have to pay employment taxes in the following conditions:

A. Social Security and Medicare Taxes:

If you pay $2,600 or more in cash wages to any one household employee in 2023, you need to withhold and pay social security (6.2%) and Medicare (1.45%) taxes.

B. Federal Unemployment Tax (FUTA):

If you pay a total of $1,000 or more in cash wages in any calendar quarter of 2022 or 2023, you need to pay FUTA tax– which is 6% on the first $7,000 of wages.

To review the terms and updated rates for the current year, click here.

What Forms Must You File?

If you have someone working in your home and you pay them a certain amount, there are specific forms you need to fill out for taxes:

  1. Employer Identification Number (EIN): Get an EIN from the IRS.
  2. Form W-2: Report wages over $2,600 or wages with federal income tax withholding. Provide copies to employees by January 31, 2024, and file with Form W-3 to the SSA.
  3. Employee Departure: Issue Form W-2 promptly if an employee leaves in 2023.
  4. Schedule H (Form 1040): Report household employment taxes with your 2023 tax return by April 15, 2024.
  5. Filing Options: If not filing a 2023 tax return, file Schedule H separately or include taxes with other employment tax returns (Form 941, Form 944, or Form 943).

Key Dates for Household Employers

  1. January 31, 2024: Provide Form W-2 to employees; file Copy A with SSA.
  2. April 15, 2024: File Schedule H with personal tax return; pay any owed taxes.
  3. Throughout the year: Keep payroll records and, if applicable, make quarterly estimated tax payments.
  4. Employee Departure: Provide final Form W-2 promptly.

Check out the detailed documents attached below to gain a comprehensive understanding of Household Employer's Tax.