Tax Forms & Schedules
Schedule H: The Household Employment Tax Form
Schedule H is the IRS form you attach to your Form 1040 to report and pay employment taxes for a household worker, the taxes people call the “nanny tax.” If you paid a nanny, housekeeper, senior caregiver, or other domestic employee $3,000 or more in cash wages during 2026, you generally owe Social Security and Medicare tax on those wages and report it here. You file one Schedule H per year with your personal income tax return, not on a separate quarterly schedule.
Schedule H bundles three federal taxes into one annual filing: Social Security and Medicare (FICA), federal unemployment (FUTA), and any federal income tax you withheld for the worker. It applies to employees you control, not to independent contractors, who report their own taxes.
Who has to file Schedule H
You must file Schedule H for 2026 if any one of three things is true: you paid a single household employee $3,000 or more in cash wages, you paid $1,000 or more in cash wages to household employees in any calendar quarter of 2025 or 2026 (the FUTA test), or you withheld federal income tax from a household worker at their request.
A household employee is someone you hire to do work in or around your home when you control what work is done and how it is done. That usually covers nannies, babysitters (over the wage threshold), housekeepers, private nurses, senior caregivers, gardeners, and drivers. Workers who set their own hours, supply their own tools, and offer services to the public are typically independent contractors, not employees. The distinction matters because it decides whether you file Schedule H at all. See our breakdown of the employee vs independent contractor tax difference for the control test the IRS applies.
Certain workers are exempt from the FICA wage count even over the threshold. You generally do not owe Social Security and Medicare on wages paid to your spouse, your own child under age 21, your parent (with limited exceptions for childcare), or an employee under age 18 whose principal occupation is not household work (a student, for example).
The 2026 nanny tax threshold
For 2026, the Social Security and Medicare wage threshold is $3,000 in cash wages paid to any one household employee, up from $2,800 in 2025. Cross that line for a single worker and all of that worker’s cash wages become subject to FICA, not just the amount above $3,000. The threshold is per employee, so two workers paid $2,500 each stay under it.
The threshold counts cash wages only. The value of food, lodging, and other non-cash benefits you provide is generally not counted toward the $3,000 test and is generally not subject to Social Security and Medicare tax when given for your convenience.
The FUTA test is separate and uses a different number. If you paid $1,000 or more in total cash wages to all household employees in any single calendar quarter of 2025 or 2026, you owe federal unemployment tax, even if no single worker hit the $3,000 FICA threshold.
| Item | 2026 figure | Notes |
|---|---|---|
| FICA wage threshold | $3,000 per employee | Was $2,800 in 2025 |
| Social Security rate | 6.2% employee + 6.2% employer | 12.4% total |
| Social Security wage base | $184,500 | Wages above this are not subject to SS tax |
| Medicare rate | 1.45% employee + 1.45% employer | 2.9% total, no wage cap |
| Additional Medicare Tax | 0.9% withholding | On wages over $200,000 paid to one employee |
| FUTA rate | 6.0% gross, 0.6% net | Net rate after full 5.4% state credit |
| FUTA wage base | First $7,000 per employee | Per employee, per year |
| FUTA quarterly test | $1,000 in any quarter | 2025 or 2026 |
FICA and FUTA on household workers
Household workers over the threshold trigger two payroll tax systems. FICA (Social Security and Medicare) totals 15.3% split between you and the worker: 6.2% each for Social Security and 1.45% each for Medicare. FUTA (federal unemployment) is your cost alone, at a net 0.6% on the first $7,000 of each worker’s wages in most states.
FICA is a shared tax. You withhold the employee’s half, 7.65%, from their pay and add your matching 7.65% as employer. Many household employers choose to pay the employee’s share themselves rather than withhold it. If you do that, the amount you cover is treated as additional taxable wages to the worker in most cases.
Social Security tax stops at the wage base. In 2026 you owe Social Security tax only on the first $184,500 of a worker’s wages. Medicare has no ceiling, and you must withhold an extra 0.9% Additional Medicare Tax on any wages over $200,000 you pay one employee in the year (the employer does not match that 0.9%).
FUTA is your expense as the employer. The gross FUTA rate is 6.0% on the first $7,000 of each worker’s cash wages, but you can claim a credit of up to 5.4% for state unemployment taxes you paid on time, dropping the effective rate to 0.6%, or $42 per worker per year. In a few “credit reduction” states the net rate can be higher, depending on that state’s federal loan status. State unemployment registration and rates vary by state, so check your state’s requirements separately.
The EIN requirement
You cannot use your Social Security number to report household employment taxes. You need a separate Employer Identification Number (EIN) from the IRS, and you must put that EIN on Schedule H, the worker’s Form W-2, and the Form W-3 transmittal. An EIN is free.
You can apply for an EIN online through the IRS in a few minutes, or by mailing or faxing Form SS-4. Our guide to Form SS-4 and how to apply for an EIN walks through the application line by line. Apply well before your first W-2 deadline, because you need the number to file those wage statements.
The EIN identifies you as a household employer. It does not turn your home into a business or change how you file your personal return; you still file Schedule H with your individual Form 1040.
Filing Schedule H with Form 1040
Schedule H is not a standalone filing. You attach it to your Form 1040 (or 1040-SR, 1040-NR, or 1040-SS) and file it by the April 15, 2027 deadline for the 2026 tax year. The household employment tax you calculate on Schedule H flows into the “Other Taxes” section of your 1040 and is added to your total tax due. For context on where it lands, see Form 1040 explained.
Because Schedule H tax is paid with your annual return, it can create a large balance in April if you did not plan for it. Many household employers cover it during the year through higher paycheck withholding at their own job or through quarterly estimated tax payments, which can help avoid an underpayment penalty.
Before you file Schedule H in the spring, you have an earlier obligation. You must give your worker a Form W-2 and file Copy A plus a Form W-3 with the Social Security Administration by February 1, 2027 for 2026 wages. Miss the W-2 step and you can face separate penalties even if your Schedule H is correct.
Follow these steps for a 2026 household employer:
- Determine whether your worker is an employee or independent contractor.
- Apply for an EIN if you do not already have one.
- Track cash wages, withheld FICA, and any income tax withheld through the year.
- Register for state unemployment insurance and pay state taxes as required.
- Issue Form W-2 to the worker and file W-2/W-3 with the SSA by February 1, 2027.
- Complete Schedule H and attach it to your 2026 Form 1040, filed by April 15, 2027.
Frequently asked questions
What is the nanny tax threshold for 2026?
The 2026 threshold for Social Security and Medicare tax is $3,000 in cash wages paid to any one household employee, up from $2,800 in 2025. Once you cross $3,000 for a single worker, all of that worker’s cash wages are subject to FICA. A separate FUTA test applies when you pay $1,000 or more in any calendar quarter.
Do I need an EIN to file Schedule H?
Yes. You must obtain an Employer Identification Number from the IRS and use it on Schedule H, the worker’s Form W-2, and Form W-3. You cannot substitute your Social Security number. An EIN is free and can be requested online or on Form SS-4. Getting it early matters because you need it to file W-2 forms by the February deadline.
Is Schedule H filed quarterly or annually?
Annually. Unlike Form 941 for most businesses, Schedule H is filed once a year with your personal Form 1040, due April 15, 2027 for the 2026 tax year. The tax may still need to be funded during the year through extra withholding or estimated payments to avoid an underpayment penalty, since it can create a sizable April balance.
What is the difference between FICA and FUTA on Schedule H?
FICA is Social Security (6.2% each side) and Medicare (1.45% each side), a shared tax split between you and the worker, triggered at $3,000 in wages. FUTA is federal unemployment tax, an employer-only cost of a net 0.6% on the first $7,000 of wages, triggered by paying $1,000 in any calendar quarter. Both are reported on the same Schedule H.
Are family members subject to household employment tax?
Often not for FICA. Wages you pay your spouse, your child under age 21, your parent (with limited exceptions), or an employee under age 18 whose main job is not household work are generally exempt from Social Security and Medicare tax. Exemptions depend on the relationship and facts, so confirm each case against IRS Publication 926.
Can I just pay my nanny as an independent contractor?
Usually no. If you control what work is done and how, the worker is your employee, and issuing a 1099 instead of a W-2 can be misclassification. Misclassification can lead to back taxes and penalties. Review the IRS control test in our employee vs independent contractor guide before deciding.
Reviewed by The Ledgerism Editorial Team. Last reviewed: July 2026.