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1
VERSION A
I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
SCHEDULE H (FORM 1040), PAGE 1 of 2
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: NONE 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD
Action
Date
Signature
O.K. to print
PRINTS: HEAD to HEAD
INK: BLACK
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT
Revised proofs
requested
Copy A: 100% Black
Copy B: 100% Pantone Yellow
SCHEDULE H
(Form 1040)
Department of the Treasury
Internal Revenue Service (99)
OMB No. 1545-1971
Household Employment Taxes
(For Social Security, Medicare, Withheld Income, and Federal Unemployment (FUTA) Taxes)
© Attach to Form 1040, 1040NR, 1040-SS, or 1041.
© See separate instructions.
Name of employer
2006
f
o
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a
6
t
0
f
0
a
2
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D /31
8
0
Attachment
Sequence No.
44
Social security number
Employer identification number
A
Did you pay any one household employee cash wages of $1,500 or more in 2006? (If any household employee was your
spouse, your child under age 21, your parent, or anyone under age 18, see the line A instructions on page H-3 before you
answer this question.)
Yes. Skip lines B and C and go to line 1.
No. Go to line B.
B
Did you withhold federal income tax during 2006 for any household employee?
Yes. Skip line C and go to line 5.
No. Go to line C.
C
Did you pay total cash wages of $1,000 or more in any calendar quarter of 2005 or 2006 to all household employees?
(Do not count cash wages paid in 2005 or 2006 to your spouse, your child under age 21, or your parent.)
No. Stop. Do not file this schedule.
Yes. Skip lines 1-9 and go to line 10 on the back. (Calendar year taxpayers having no household employees in 2006 do
not have to complete this form for 2006.)
Part I
Social Security, Medicare, and Income Taxes
1
1
Total cash wages subject to social security taxes (see page H-4)
2
Social security taxes. Multiply line 1 by 12.4% (.124)
3
Total cash wages subject to Medicare taxes (see page H-4)
4
Medicare taxes. Multiply line 3 by 2.9% (.029)
4
5
Federal income tax withheld, if any
5
6
Total social security, Medicare, and income taxes. Add lines 2, 4, and 5
6
7
Advance earned income credit (EIC) payments, if any
7
8
Net taxes (subtract line 7 from line 6)
8
9
Did you pay total cash wages of $1,000 or more in any calendar quarter of 2005 or 2006 to household employees?
(Do not count cash wages paid in 2005 or 2006 to your spouse, your child under age 21, or your parent.)
2
3
No. Stop. Enter the amount from line 8 above on Form 1040, line 62. If you are not required to file Form 1040, see the
line 9 instructions on page H-4.
Yes. Go to line 10 on the back.
For Privacy Act and Paperwork Reduction Act Notice, see page 7 of the separate instructions.
Cat. No. 12187K
Schedule H (Form 1040) 2006
1
VERSION A
I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
SCHEDULE H (FORM 1040), PAGE 2 of 2
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: NONE 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD
PRINTS: HEAD to HEAD
INK: BLACK
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT
Copy A: 100% Black
Copy B: 100% Pantone Yellow
Schedule H (Form 1040) 2006
Part II
10
11
12
Page
2
Federal Unemployment (FUTA) Tax
f
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Are you required to pay unemployment contributions to only one state? (If you paid contributions to XXXXXXX
State, check "No.")
Did you pay all state unemployment contributions for 2006 by April 16, 2007? Fiscal year filers, see page H-4
Were all wages that are taxable for FUTA tax also taxable for your state’s unemployment tax?
Yes No
10
11
12
Next: If you checked the “Yes” box on all the lines above, complete Section A.
If you checked the “No” box on any of the lines above, skip Section A and complete Section B.
Section A
13
14
Name of the state where you paid unemployment contributions ©
State reporting number as shown on state unemployment tax return
15
16
Contributions paid to your state unemployment fund (see page H-4)
Total cash wages subject to FUTA tax (see page H-4)
17
FUTA tax. Multiply line 16 by .008. Enter the result here, skip Section B, and go to line 26
©
15
16
17
Section B
18
Complete all columns below that apply (if you need more space, see page H-5):
(b)
(a)
State reporting number
Name
as shown on state
of
unemployment tax
state
return
(c)
Taxable wages (as
defined in state act)
(d)
State experience rate
period
From
To
(e)
State
experience
rate
(f)
Multiply col. (c)
by .054
(g)
Multiply col. (c)
by col. (e)
(h)
(i)
Subtract col. (g) Contributions
from col. (f). If
paid to state
zero or less, unemployment
enter -0-.
fund
19
19
Totals
20
21
20
Add columns (h) and (i) of line 19
Total cash wages subject to FUTA tax (see the line 16 instructions on page H-4)
21
22
Multiply line 21 by 6.2% (.062)
22
23
24
23
Multiply line 21 by 5.4% (.054)
Enter the smaller of line 20 or line 23
(XXXXXX State employers must use the worksheet in the separate instructions and check here)
24
25
FUTA tax. Subtract line 24 from line 22. Enter the result here and go to line 26
25
Part III
Total Household Employment Taxes
26
Enter the amount from line 8. If you checked the “Yes” box on line C of page 1, enter -0-
26
27
28
Add line 17 (or line 25) and line 26
Are you required to file Form 1040?
Yes. Stop. Enter the amount from line 27 above on Form 1040, line 62. Do not complete
Part IV below.
No.
You may have to complete Part IV. See page H-5 for details.
27
Part IV
Address and Signature—Complete this part only if required. See the line 28 instructions on page H-5.
Address (number and street) or P.O. box if mail is not delivered to street address
Apt., room, or suite no.
City, town or post office, state, and ZIP code
Under penalties of perjury, I declare that I have examined this schedule, including accompanying statements, and to the best of my knowledge and belief, it is true,
correct, and complete. No part of any payment made to a state unemployment fund claimed as a credit was, or is to be, deducted from the payments to employees.
©
©
Employer’s signature
Date
Schedule H (Form 1040) 2006
Printed on recycled paper
PAGER/SGML
Userid: ________
Fileid: I1040SH.XML
❏
Leading adjust: +25%
Draft
(Init. & date)
(21-Nov-2005)
❏
Ok to Print
Filename: D:\USERS\c4jcb\documents\epicfiles\Sch H\05i1040sch-H 112105.xml
Page 1 of 10 of 2005 Instructions for Schedule H (Form 1040) 10:51 - 21-NOV-2005
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Department of the Treasury
Note: This booklet does not
Internal Revenue Service
contain tax forms.
2005 Instructions for Schedule H (Form 1040)
Household Employment Taxes
Household
Employers
Here is the information you need to fill in:
• Schedule H for figuring your household employment taxes.
• Form W-2 for reporting wages paid to your employees.
• Form W-3 for sending Copy A of Form W-2 to the Social Security Administration.
No household employees in 2005? If you did not have any household employees in 2005,
you do not have to file Schedule H (Form 1040) for 2005.
New York State employer? If yes, you must use the worksheet on page H-5.
We have been asked:
What do I do after I fill in Schedule H? Enter the taxes from Schedule H on the “Household
employment taxes” line of your Form 1040, 1040NR, 1040-SS, or 1041. You do this because
these taxes are added to your income taxes.
How do I file Schedule H? File Schedule H with your Form 1040, 1040NR, 1040-SS, or
1041. If you are not filing a 2005 tax return, file Schedule H by itself.
Do I make a separate payment? No. You pay all the taxes to the United States Treasury,
even the social security taxes.
When do I pay? Most filers must pay by April 17, 2006.
How many copies of Form W-3 do I send to the Social Security Administration (SSA)?
Send one copy of Form W-3 with Copy A of Form(s) W-2 to the SSA, and keep one copy of
Form W-3 for your records.
Contents
Page
Page
Schedule H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-3
Form W-2 and Form W-3 . . . . . . . . . . . . . . . . . . . . . . . . H-5
The Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-2
Who Needs To File Schedule H? . . . . . . . . . . . .
Who Needs To File Form W-2 and Form W-3? . .
Do You Have an Employer Identification Number
(EIN)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Can Your Employee Legally Work in the United
States? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
What About State Employment Taxes? . . . . . . . .
Contents
. . . . . . . H-2
. . . . . . . H-2
You Should Also Know . . . . . . . . . . . . . . . . . . . . . . . . . . H-6
What’s New for 2006 . . . . . . . . . . . . . . . . . . . .
Estimated Tax Penalty . . . . . . . . . . . . . . . . . . . .
What Records To Keep . . . . . . . . . . . . . . . . . . .
What Is the Earned Income Credit (EIC)? . . . . . .
Rules for Business Employers . . . . . . . . . . . . . .
State Disability Payments . . . . . . . . . . . . . . . . .
How To Get Forms and Publications . . . . . . . . .
Privacy Act and Paperwork Reduction Act Notice
. . . . . . . H-2
. . . . . . . H-3
. . . . . . . H-3
When and Where To File . . . . . . . . . . . . . . . . . . . . . . . . H-3
Schedule H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-3
Form W-2 and Form W-3 . . . . . . . . . . . . . . . . . . . . . . . . H-3
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H-6
H-6
H-6
H-6
H-6
H-6
H-7
H-7
Completed Example of Schedule H, Form W-2, and
Form W-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-7
How To Fill In Schedule H, Form W-2, and Form
W-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-3
H-1
Cat. No. 21451X
Page 2 of 10 of 2005 Instructions for Schedule H (Form 1040) Household Employment
Taxes
10:51 - 21-NOV-2005
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
does not matter if the wages paid are for work done hourly, daily,
weekly, or by the job.
Important Dates!
By . . . . . . . . . . . . .
You must . . . . . . . . . . . . . . . . . . .
January 31, 2006
Give your employee Form W-2.
February 28, 2006
(March 31, 2006 if
you file
electronically)
Send Copy A of Form W-2 with
Form W-3 to the Social Security
Administration.
April 17, 2006 (see
page H-3 for
exceptions)
File Schedule H and pay your
household employment taxes with
your 2005 tax return.
Note. If a government agency files Schedule H for the worker, you
do not need to file it.
Cash wages. Cash wages include wages paid by checks, money
orders, etc. Cash wages do not include the value of food, lodging,
clothing, or other noncash items you give a household employee.
For 2005, you can generally give your employee transportation benefits such as transit passes worth up to
TIP
$105 per month without the benefits counting as cash
wages. However, the value of benefits over $105 a
month is included as wages. See Transportation (Commuting) Benefits in Publication 15-B, Employer’s Tax Guide to Fringe Benefits,
for more information.
Calendar quarter. A calendar quarter is January through March,
April through June, July through September, or October through
December.
The Basics
Workers who are not your employees. Workers you get from an
Reminder
agency are not your employees if the agency is responsible for who
does the work and how it is done. Self-employed workers are also
not your employees. A worker is self-employed if only he or she
can control how the work is done. A self-employed worker usually
provides his or her own tools and offers services to the general
public in an independent business.
If you must file a 2005 Form W-2, Wage and Tax Statement, for
any household employee, you must also send Form W-3, Transmittal of Wage and Tax Statement, with Copy A of Form(s) W-2 to the
Social Security Administration.
Example. You made an agreement with Paul Brown to care for
your lawn. Paul runs a lawn care business and offers his services to
the general public. He hires his own helpers and provides his own
tools and supplies. Neither Paul nor his helpers are your employees.
Who Needs To File Schedule H?
You must file Schedule H (Form 1040) if you answer “Yes” to any
of the questions on lines A, B, or C.
For more information, see Publication 926, Household
Employer’s Tax Guide.
Only 8 lines for most people. Depending on your answers, you may
find that you only have to complete lines A, 1 through 4, 6, 8, and 9.
Who Needs To File Form W-2 and
Form W-3?
Did you have a household employee? If you hired someone to do
household work and you were able to control what work he or she
did and how he or she did it, you had a household employee. This is
true even if you gave the employee freedom of action. What matters
is that you had the right to control the details of how the work was
done.
You must file Form W-2 for each household employee to whom
you paid $1,400 or more of cash wages in 2005 that are subject to
social security and Medicare taxes. To find out if the wages are
subject to these taxes, see the instructions for Schedule H, lines 1
and 3, on page H-4. If the wages are not subject to these taxes but
you withheld federal income tax from the wages of any household
employee, you must file Form W-2 for that employee.
Example. You paid Betty Oak to babysit your child and do light
housework 4 days a week in your home. Betty followed your
specific instructions about household and child care duties. You
provided the household equipment and supplies Betty needed to do
her work. Betty is your household employee.
If you file one or more Forms W-2, you must also file Form
W-3.
Household work is work done in or around your home. Some
examples of workers who do household work are:
Babysitters
Caretakers
Cleaning people
Drivers
Health aides
Housekeepers
Do You Have an Employer
Identification Number (EIN)?
Nannies
Private nurses
Yard workers
If you do not have an EIN, see Form SS-4, Application for Employer Identification Number. The instructions explain how you
can get an EIN immediately over the internet, by telephone, or in
about 4 weeks if you apply by mail. See How To Get Forms and
Publications on page H-7 for details on how to get forms and
If a worker is your employee, it does not matter whether the
work is full or part-time or that you hired the worker through an
agency or from a list provided by an agency or association. Also, it
H-2
Page 3 of 10 of 2005 Instructions for Schedule H (Form 1040) Household Employment
Taxes
10:51 - 21-NOV-2005
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
publications including Form SS-4. Do not use a social security
number in place of an EIN.
order. Household employers that are tax-exempt, such as churches,
may file Schedule H by itself.
Can Your Employee Legally Work in
the United States?
Form W-2 and Form W-3
By January 31, 2006, you must give Copies B, C, and 2 of Form
W-2 to each employee. You will meet this requirement if the form
is properly addressed, mailed, and postmarked no later than January
31, 2006.
It is unlawful to employ an alien who cannot legally work in the
United States. When you hire a household employee to work for
you on a regular basis, you and the employee must each complete
part of the U.S. Citizenship and Immigration Services (USCIS)
Form I-9, Employment Eligibility Verification. The Bureau was
formerly called the Immigration and Naturalization Service, or INS.
You must verify that the employee is either a U.S. citizen or an alien
who can legally work and you must keep Form I-9 for your records.
You can get the form and the USCIS Handbook for Employers by
calling 1-800-870-3676, or by visiting the USCIS website at www.
uscis.gov.
By February 28, 2006, (March 31, 2006, if you file electronically) send Copy A of all Forms W-2 with Form W-3 to the Social
Security Administration (SSA). Mail Copy A of all Forms W-2
with Form W-3 to:
Social Security Administration
Data Operations Center
Wilkes-Barre, PA 18769-0001
For certified mail, the ZIP code is 18769-0002. If you use a carrier
other than the U.S. Postal Service, add “ATTN: W-2 Process, 1150
E. Mountain Dr.” to the address and change the ZIP code to
“18702-7997.”
What About State Employment
Taxes?
If you employed a household employee in 2005, you probably have
to pay contributions to your state unemployment fund for 2005. To
find out if you do, contact your state unemployment tax agency
right away. You should also find out if you need to pay or collect
other state employment taxes or carry workers’ compensation insurance.
Note. Check with your state, city, or local tax department to find
out if you must send Copy 1 of Form W-2.
Penalties. You may have to pay a penalty if you do not give Forms
W-2 to your employees or file Copy A of the forms with the SSA.
You may also have to pay a penalty if you do not show your
employee’s social security number on Form W-2 or do not provide
correct information on the form.
When and Where To File
Schedule H
How To Fill In Schedule H, Form
W-2, and Form W-3
If you file Forms 1040, 1040NR, 1040-SS, or 1041 for 2005,
remember to attach Schedule H to it. Mail your return by April 17,
2006, to the address shown in your tax return booklet.
Schedule H
Exceptions. If you get an extension of time to file your return, file
!
it with Schedule H by the extended due date. If you are a fiscal year
filer, file your return and Schedule H by the due date of your fiscal
year return, including extensions.
CAUTION
If you were notified that your household employee received payments from a state disability plan, see page
H-6.
Social security number. Enter your social security number. (Form
Note. If you are a calendar year taxpayer and have no household
1041 filers, do not enter a number in this space. But be sure to enter
your EIN in the space provided.)
employees for 2005, you do not have to file Form 1040 (Schedule
H) for 2005.
Employer identification number (EIN). An EIN is a nine-digit
If you are not required to file a 2005 tax return (for example,
because your income is below the amount that requires you to file),
you must file Schedule H by April 17, 2006. Complete Schedule H
and put it in an envelope with your check or money order. Do not
send cash. See the list of addresses on page H-10. Mail your completed Schedule H and payment to the address listed for the place
where you live. Make your check or money order payable to the
“United States Treasury” for the total household employment taxes
due. Enter your name, address, social security number, daytime
phone number, and “2005 Schedule H” on your check or money
number assigned by the IRS. The digits are arranged as follows:
00-0000000. Enter your EIN in the space provided. If you do not
have an EIN, see Do You Have an Employer Identification Number
(EIN)? earlier. If you applied for an EIN but have not received it,
enter “Applied For.” Do not use your social security number as an
EIN.
Line A. To figure the total cash wages you paid in 2005 to each
household employee, do not count amounts paid to any of the
following individuals.
H-3
Page 4 of 10 of 2005 Instructions for Schedule H (Form 1040) Household Employment
Taxes
10:51 - 21-NOV-2005
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•
•
•
•
Your spouse.
Your child who was under age 21.
Your parent. (See Exception for parents below.)
Your employee who was under age 18 at any time during
2005. If the employee was not a student, see Exception for employees under age 18 below.
Exception for parents. Count the cash wages you paid your
parent for work in or around your home if both 1 and 2 below apply.
1. Your child who lived with you was under age 18 or had a
physical or mental condition that required the personal care of an
adult for at least 4 continuous weeks in a calendar quarter.
If you file
Form. . .
Then enter the amount from
Schedule H, line 8, on. . .
1040
line 62
1040NR
line 57
1040-SS
Part I, line 4
1041
Schedule G, line 6
If you do not file any of the above forms, complete Part IV of
Schedule H and follow the instructions under When and Where To
File on page H-3.
2. You were divorced and not remarried, a widow or widower,
or married to and living with a person whose physical or mental
condition prevented him or her from caring for the child during that
4-week period.
Part II. Federal Unemployment (FUTA) Tax
FUTA tax, with state unemployment systems, provides for payments of unemployment compensation to workers who have lost
their jobs. Most employers pay both a federal and state unemployment tax.
Exception for employees under age 18. Count the cash wages
you paid to a person who was under age 18 and not a student if
providing household services was his or her principal occupation.
The FUTA tax rate is 6.2%. But see Credit for contributions paid
to state below. Do not deduct the FUTA tax from your employee’s
wages. You must pay it from your own funds.
Credit for contributions paid to state. You may be able to take a
Part I. Social Security, Medicare, and Income
Taxes
credit of up to 5.4% against the FUTA tax, resulting in a net tax rate
of 0.8%. But to do so, you must pay all the required contributions
for 2005 to your state unemployment fund by April 17, 2006. Fiscal
year filers must pay all required contributions for 2005 by the due
date of their federal income tax returns (not including extension). If
you pay contributions to the State of New York, see the instructions
for Line 24.
Social security and Medicare taxes pay for retirement, disability,
and health benefits for workers and their families. You and your
employees pay these taxes in equal amounts.
For social security, the tax rate is 6.2% each for you and your
employee. For Medicare, the rate is 1.45% each. If you did not
deduct the employee’s share from his or her wages, you must pay
the employee’s share and your share (a total of 12.4% for social
security and 2.9% for Medicare). See Form W-2 and Form W-3 on
page H-5 for more information.
Contributions are payments that a state requires you, as an
employer, to make to its unemployment fund for the payment of
unemployment benefits. However, contributions do not include:
• Any payment such as FUTA tax deducted or deductible from
your employees’ pay;
• Penalties, interest, or special administrative taxes not included
in the contributions rate the state gave you; and
• Voluntary contributions you paid to get a lower experience
rate.
Lines 1 and 3. Enter on lines 1 and 3 the total cash wages (defined
on page H-2) paid in 2005 to each household employee who meets
the $1,400 test, explained later. However, if you paid any household
employee cash wages of more than $90,000 in 2005, include on line
1 only the first $90,000 of that employee’s cash wages. On line 3,
include that employee’s total cash wages.
Lines 10 through 12. Answer the questions on lines 10 through 12
to see if you should complete Section A or Section B of Part II.
Fiscal year filers. If you paid all state unemployment contributions for 2005 by the due date of your return (not including extensions), check the “Yes” box on line 11. Otherwise, check the “No”
box.
$1,400 test. Any household employee to whom you paid cash
wages of $1,400 or more in 2005 meets this test. The test applies to
cash wages paid in 2005 regardless of when the wages were earned.
To figure the total cash wages you paid in 2005 to each household
employee, see the instructions for line A, earlier.
Line 13. Enter the two-letter abbreviation of the name of the state
(or the District of Columbia, Puerto Rico, or the Virgin Islands) to
which you paid unemployment contributions.
Line 15. Enter the total contributions (defined earlier) you paid to
your state unemployment fund for 2005. If you did not have to
make contributions because your state gave you a zero percent
experience rate, enter “0% rate” on line 15.
Lines 5 and 7. Enter on line 5 any federal income tax you withheld
from the wages you paid your household employees in 2005. On
line 7, enter any advance EIC payments you made to your household employees in 2005.
Line 16. Enter the total cash wages you paid in 2005 to each
household employee, including employees paid less than $1,000.
However, do not include cash wages paid in 2005 to any of the
following individuals.
• Your spouse.
• Your child who was under age 21.
• Your parent.
Line 9. For each calendar quarter of 2004 and 2005, add the cash
wages you paid to all your household employees in that quarter. Is
the total for any quarter in 2004 or 2005 $1,000 or more?
If you paid any household employee more than $7,000 in 2005,
include on line 16 only the first $7,000 of that employee’s cash
wages.
Yes. Complete Part II of Schedule H.
No. Follow the instructions in the chart below.
H-4
Page 5 of 10 of 2005 Instructions for Schedule H (Form 1040) Household Employment
Taxes
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Line 18. Complete all columns that apply. If you do not, you will
Part III. Total Household Employment Taxes
not get a credit. If you need more space, attach a statement using the
same format as line 18. Your state will provide the experience rate.
If you do not know your rate, contact your state unemployment tax
agency.
You must complete columns (a), (b), (c), and (i), even if you
were not given an experience rate. If you were given an experience
rate of 5.4% or higher, you must also complete columns (d) and (e).
If you were given a rate of less than 5.4%, you must complete all
columns.
If you were given a rate for only part of the year, or the rate
changed during the year, you must complete a separate line for each
rate period.
Column (c). Enter the taxable wages on which you must pay
taxes to the unemployment fund of the state shown in column (a). If
your experience rate is zero percent, enter the amount of wages you
would have had to pay taxes on if that rate had not been granted.
Column (i). Enter the total contributions (defined earlier) you
paid to the state unemployment fund for 2005 by April 17, 2006.
Fiscal year filers, enter the total contributions you paid to the state
unemployment fund for 2005 by the due date of your return (not
including extensions). If you are claiming excess credits as payments of state unemployment contributions, attach a copy of the
letter from your state.
Line 24. Complete the worksheet below only if you are a New
York State employer.
Line 28. Follow the instructions in the chart below.
If you file
Form. . .
Then do not complete Part IV but
enter the amount from Schedule
H, line 27, on . . .
1040
line 62
1040NR
line 57
1040-SS
Part I, line 4
1041
Schedule G, line 6
If you do not file any of the above forms, complete Part IV of
Schedule H and follow the instructions under When and Where To
File on page H-3.
Form W-2 and Form W-3
If you file Form W-2, you must also file Form W-3
You must report both cash and noncash wages in box 1, as well
as tips and other compensation. The completed Forms W-2 and
W-3 in the example (see page H-9) show how the entries are made.
Employee’s portion of taxes paid by employer. If you paid the
employee’s share of social security and Medicare taxes, the following rules apply. See pages H-7, H-8, and H-9.
• Enter the amount you paid for the employee in boxes 4 and 6
(do not include your share of these taxes).
• Add the amounts in boxes 4 and 6 to the amount in box 3 (or
box 5 if that amount is larger).
• Enter the total in box 1.
TIP
On Form W-3, put an “X” in the “Hshld. emp.” box of
box b.
Keep for Your Records
Worksheet for New York State Employers —Line 24
1. Enter the smaller of the amounts from Schedule H, line 20 or 23. . . . . . . . . . . . . . . . . . . . 1.
2. Enter your New York wages from Schedule H, line 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Multiply the amount from line 2 of this worksheet by .006 and enter the result here. . . . . . 3.
4. Subtract line 3 of this worksheet from line 1 of this worksheet and enter the result here and
on Schedule H, line 24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
H-5
Page 6 of 10 of 2005 Instructions for Schedule H (Form 1040) Household Employment
Taxes
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You Should Also Know
What Is the Earned Income Credit
(EIC)?
What’s New for 2006
The EIC is a refundable tax credit for certain workers.
Which employees must I notify about the EIC? You must notify
The tax rates mentioned in the instructions for Parts I
and II of Schedule H will not change. However, the cash
TIP
wage threshold that you pay to any one household employee increases to $1,500 for 2006. The 2006 Employee Social Security and Medicare Tax Withholding Table is in
Publication 926, Household Employer’s Tax Guide.
your household employee about the EIC if you agreed to withhold
federal income tax from the employee’s wages but did not do so
because the income tax withholding tables showed that no tax
should be withheld.
Note. You are encouraged to notify each employee whose wages
for 2005 were less than $35,263 ($37,263 if married filing jointly)
that he or she may be eligible for the EIC.
Limit on Wages Subject to Social Security Tax. The $90,000
amount in the instructions for Part I of Schedule H will increase to
$94,200.
How and when must I notify my employees? You must give the
employee one of the following:
• The official IRS Form W-2, that has the required information
about the EIC on the back of Copy B.
Estimated Tax Penalty
• A substitute Form W-2 with the same EIC information on the
back of the employee’s copy that is on Copy B of the official IRS
Form W-2.
You may need to increase the federal income tax withheld from
your pay, pension, annuity, etc. or pay estimated tax payments to
avoid an estimated tax penalty based on your household employment taxes shown on line 27 of Schedule H (Form 1040). You may
increase your federal income tax withheld by filing a new Form
W-4, Employee’s Withholding Allowance Certificate, or Form
W-4P, Withholding Certificate for Pension or Annuity Payments.
Make estimated tax payments by filing Form 1040-ES, Estimated
Tax for Individuals. For more information, see Publication 505, Tax
Withholding and Estimated Tax.
!
• Notice 797, Possible Federal Tax Refund Due to the Earned
Income Credit (EIC).
• Your written statement with the same wording as Notice 797.
If you are not required to give the employee a Form W-2, you
must provide the notification by February 7, 2006.
You must hand the notice directly to the employee or send it by
First-Class Mail to the employee’s last known address.
Estimated tax payments must be made during the tax
year that the tax liability is incurred.
How do my employees claim the EIC? Eligible employees claim
the EIC on their 2005 tax returns.
CAUTION
How do my employees get advance EIC payments? Eligible employees who have a qualifying child can get part of the credit with
their pay during the year by giving you a completed Form W-5. You
must include advance EIC payments with wages paid to these
employees. For details, including tables that show you how to
figure the amount to add to the employee’s net pay, see Publication
15 (Circular E), Employer’s Tax Guide.
Exception. You will not be penalized for failure to make estimated
tax payments if both 1 and 2 below apply for the year.
1. You will not have federal income tax withheld from wages,
pensions, or any other payments you receive.
2. Your income taxes, excluding your household employment
taxes, would not be enough to require payment of estimated taxes.
Rules For Business Employers
What Records To Keep
Do not use Schedule H if you chose to report employment taxes for
your household employees along with your other employees on
Form 941, Employer’s Quarterly Federal Tax Return, or Form 943,
Employer’s Annual Federal Tax Return for Agricultural Employees. If you report this way, be sure to include your household
employees’ wages on your Form 940 (or Form 940-EZ),
Employer’s Annual Federal Unemployment (FUTA) Tax Return.
You must keep copies of Schedule H and related Forms W-2, W-3,
W-4, and W-5, Earned Income Credit Advance Payment Certificate, for at least 4 years after the due date for filing Schedule H or
the date the taxes were paid, whichever is later. If you have to file
Form W-2, also keep a record of each employee’s name and social
security number. Each payday, you should record the dates and
amounts of:
•
•
•
•
•
Cash and noncash wage payments.
State Disability Payments
Any employee social security tax withheld.
Certain state disability plan payments to household employees are
treated as wages subject to social security and Medicare taxes. If
your employee received payments from a plan that withheld the
employee’s share of social security and Medicare taxes, include the
Any employee Medicare tax withheld.
Any federal income tax withheld.
Any advance EIC payments you made.
H-6
Page 7 of 10 of 2005 Instructions for Schedule H (Form 1040) Household Employment
Taxes
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payments on lines 1 and 3 and complete the rest of Part I through
line 5. Add lines 2, 4, and 5. From that total, subtract the amount of
these taxes withheld by the state. Enter the result on line 6. Also,
enter “disability” and the amount subtracted on the dotted line next
to line 6. See the notice issued by the state for more details.
Recordkeeping, 1hr., 38 min.; Learning about the law or the
form, 30 min.; Preparing the form, 54 min.; Copying, assembling, and sending the form to the IRS, 34 min.
If you have comments concerning the accuracy of these time
estimates or suggestions for making this form simpler, we would be
happy to hear from you. You can write to: Internal Revenue Service, Tax Products Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6406,
Washington, DC 20224. Do not send Schedule H (Form 1040) to
this address. Instead, see When and Where to File on page H-3.
How to Get Forms and Publications
To get the IRS forms and publications mentioned in these instructions (including Notice 797), visit the IRS website at www.irs.gov
or call 1-800-TAX-FORM (1-800-829-3676).
Completed Example of Schedule H,
Form W-2, and Form W-3
Privacy Act and Paperwork
Reduction Act Notice.
On February 14, 2005, Susan Green hired Helen Maple to clean her
house every Wednesday. Susan did not have a household employee
in 2004.
We ask for the information on this form to carry out the Internal
Revenue laws of the United States. You are required to give us the
information. We need it to ensure that you are complying with these
laws and to allow us to figure and collect the right amount of tax.
Susan paid Helen $50 every Wednesday for her day’s work.
Susan decided not to withhold Helen’s share of the social security
and Medicare taxes from the wages she paid Helen. Instead, she
will pay Helen’s share of these taxes from her own funds. Susan did
not withhold federal income tax because Helen did not give her a
Form W-4 to request withholding and no withholding is otherwise
required. Susan also did not pay Helen advance earned income
credit payments because Helen did not give her a Form W-5.
You are not required to provide the information requested on a
form that is subject to the Paperwork Reduction Act unless the form
displays a valid OMB control number. Books or records relating to
a form or instructions must be retained as long as their contents may
become material in the administration of any Internal Revenue law.
Helen was employed by Susan for the rest of the year (a total of
46 weeks). The following is some of the information Susan will
need to complete Schedule H, Form W-2, and Form W-3.
Subtitle C, Employment Taxes, of the Internal Revenue Code
imposes employment taxes on wages, including income tax withholding. This form is used to determine the amount of the taxes that
you owe. Section 6011 requires you to provide the requested information if the tax is applicable to you. Section 6109 requires you to
provide your employer identification number (EIN).
Helen’s total cash wages . . . . .
Helen’s share of the:
Social security tax . . . . . .
Generally, tax returns and return information are confidential, as
required by section 6103. However, section 6103 allows or requires
the IRS to disclose or give the information shown on your tax return
to others as described in the Code. For example, we may disclose
your tax information to the Department of Justice for civil and
criminal litigation, and to cities, states, and the District of Columbia
for use in administering their tax laws. We may also disclose this
information to other countries under a tax treaty, to federal and state
agencies to enforce federal nontax criminal laws, or to federal law
enforcement and intelligence agencies to combat terrorism.
Medicare tax . . . . . . . . . .
$2,300.00
($50 x 46 weeks)
$142.60
($2,300 x 6.2% (.062))
$33.35
($2,300 x 1.45% (.0145))
Helen’s total cash wages each quarter:
1st quarter . . . . . . . . . . . $300.00
2nd quarter . . . . . . . . . . $650.00
3rd quarter . . . . . . . . . . . $650.00
4th quarter . . . . . . . . . . . $700.00
($50
($50
($50
($50
x
x
x
x
6 weeks)
13 weeks)
13 weeks)
14 weeks)
Amount included in box 1 of Form W-2 and Form W-3:
Cash wages . . . . . . . . . . . . . . . . . . . . . . . . . $2,300.00
Helen’s share of social security tax paid by
Susan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
142.60
Helen’s share of Medicare tax paid by Susan
33.35
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,475.95
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for individual taxpayers filing this form is approved under OMB control
number 1545-0074 and is included in the estimates shown in the
instructions for their individual income tax return. The estimated
burden for all other taxpayers who file this form is shown below.
H-7
Page 8 of 10 of 2005 Instructions for Schedule H (Form 1040) Household Employment
Taxes
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SCHEDULE H
(Form 1040)
Department of the Treasury
Internal Revenue Service (99)
OMB No. 1545-0074
Household Employment Taxes
(For Social Security, Medicare, Withheld Income, and Federal Unemployment (FUTA) Taxes)
䊳 Attach to Form 1040, 1040NR, 1040-SS, or 1041.
䊳 See separate instructions.
Name of employer
44
Social security number
0 0 0
Susan Green
A
2005
Attachment
Sequence No.
11
1 1 1 1
Employer identification number
0 0 1
2 3 4 5 6 7
Did you pay any one household employee cash wages of $1,400 or more in 2005? (If any household employee was your
spouse, your child under age 21, your parent, or anyone under age 18, see the line A instructions on page H-3 before you
answer this question.)
⻫ Yes. Skip lines B and C and go to line 1.
No. Go to line B.
Part I
Social Security, Medicare, and Income Taxes
1
2, 3 0 0
00
1
Total cash wages subject to social security taxes (see page H-3)
2
Social security taxes. Multiply line 1 by 12.4% (.124)
3
Total cash wages subject to Medicare taxes (see page H-3)
4
Medicare taxes. Multiply line 3 by 2.9% (.029)
4
5
Federal income tax withheld, if any
5
6
Total social security, Medicare, and income taxes (add lines 2, 4, and 5)
6
7
Advance earned income credit (EIC) payments, if any
7
8
Net taxes (subtract line 7 from line 6)
8
9
Did you pay total cash wages of $1,000 or more in any calendar quarter of 2004 or 2005 to household employees?
(Do not count cash wages paid in 2004 or 2005 to your spouse, your child under age 21, or your parent.)
2
3
2, 3 0 0
285
20
00
66 70
351
90
351
90
⻫ No. Stop. Enter the amount from line 8 above on Form 1040, line 62. If you are not required to file Form 1040, see the
line 9 instructions on page H-4.
H-8
Page 9 of 10 of 2005 Instructions for Schedule H (Form 1040) Household Employment
Taxes
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Note: Although not shown, Susan also enters on Form W-2 the
required state or local income tax information in boxes 15 through 20.
a Control number
22222
Void
Visit the SSA website at www.socialsecurity.gov/employer to file
Copy A of Form W-2 electronically.
For Official Use Only
䊳
OMB No. 1545-0008
b Employer identification number (EIN)
Wages, tips, other compensation
1
2
Federal income tax withheld
4
Social security tax withheld
6
Medicare tax withheld
8
Allocated tips
2475.95
00-1234567
c Employer’s name, address, and ZIP code
3
Social security wages
2300.00
Susan Green
16 Gray Street
Anyplace, CA 92665
142.60
5
Medicare wages and tips
7
Social security tips
9
Advance EIC payment
10
Nonqualified plans
12a See instructions for box 12
2300.00
d Employee’s social security number
33.35
Dependent care benefits
000-00-4567
e Employee’s first name and initial
11
Last name
Helen R.
C
o
d
e
Maple
13
19 Pine Avenue
Anycity, CA 92666
Statutory
employee
14
Retirement
plan
Third-party
sick pay
12b
C
o
d
e
12c
Other
C
o
d
e
12d
C
o
d
e
f
Employee’s address and ZIP code
15 State
Form
Employer’s state ID number
16 State wages, tips, etc.
17 State income tax
2005
Wage and Tax
Statement
W-2
Copy A For Social Security Administration — Send this
entire page with Form W-3 to the Social Security
Administration; photocopies are not acceptable.
a
Control number
b
Kind
of
Payer
䊳
33333
941
CT-1
Military
Medicare
govt. emp.
e
Employer identification number (EIN)
1
For Privacy Act and Paperwork Reduction
Act Notice, see back of Copy D.
䊳
Third-party
sick pay
Wages, tips, other compensation
2
Federal income tax withheld
4
Social security tax withheld
6
Medicare tax withheld
8
Allocated tips
2475.95
3
Social security wages
d
Establishment number
142.60
5
Medicare wages and tips
7
Social security tips
9
Advance EIC payments
10
Dependent care benefits
11
Nonqualified plans
12
Deferred compensation
13
For third-party sick pay use only
14
Income tax withheld by payer of third-party sick pay
16
State wages, tips, etc.
17
State income tax
18
Local wages, tips, etc.
19
Local income tax
1
f
Department of the Treasury—Internal Revenue Service
2300.00
Total number of Forms W-2
2300.00
00-1234567
Employer’s name
20 Locality name
OMB No. 1545-0008
X
c
19 Local income tax
Cat. No. 10134D
For Official Use Only
943
Hshld.
emp.
18 Local wages, tips, etc.
33.35
Susan Green
16 Gray Street
Anyplace, CA 92665
g
Employer’s address and ZIP code
h
Other EIN used this year
15
State
Employer’s state ID number
Contact person
Telephone number
(
Email address
123
)
Fax number
(
For Official Use Only
456-7890
)
Under penalties of perjury, I declare that I have examined this return and accompanying documents, and, to the best of my knowledge and belief,
they are true, correct, and complete.
Signature
Form
䊳
W-3 Transmittal
Title
䊳
Date
of Wage and Tax Statements
Note: When you fill in Forms W-2 and W-3, please—
● Type or print entries, if possible, using black ink.
● Enter all money amounts without the dollar sign and comma,
but with the decimal point (for example, 2475.95 not $2,475.95).
2005
䊳
1/29/06
Department of the Treasury
Internal Revenue Service
● Do not round money amounts—show the cents portion.
H-9
Page 10 of 10 of 2005 Instructions for Schedule H (Form 1040) Household Employment
Taxes
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Do You Have To File Form 1040, 1040NR, 1040-SS, or 1041?
Yes — Attach Schedule H to that form and mail to the address in your tax return booklet.
No — Mail your completed Schedule H and payment to the Internal Revenue Service for the place where you live.
No street address is needed. See When and Where To File on page H-3 for the information to enter on your
payment.
IF you live in...
THEN use this address...
IF you live in...
THEN use this address...
Alabama, Delaware, Florida,
Georgia, North Carolina,
Rhode Island,
South Carolina, Virginia
Atlanta, GA 39901-0002
Fresno, CA 93888-0002
District of Columbia, Maine,
Maryland, Massachusetts,
New Hampshire, New York,
Vermont
Andover, MA 05501-0002
Alaska, Arizona, California,
Colorado, Hawaii, Idaho,
Montana, Nebraska, Nevada,
New Mexico, Oregon, South
Dakota, Utah, Washington,
Wyoming
Kansas City, MO 64999-0002
New Jersey, Pennsylvania
Philadelphia, PA 19255-0002
Connecticut, Illinois,
Indiana, Iowa, Michigan,
Minnesota, Missouri,
North Dakota, Ohio,
Wisconsin
Arkansas, Kansas, Kentucky,
Louisiana, Mississippi,
Oklahoma, Tennessee,
Texas, West Virginia
Austin, TX 73301-0002
American Samoa, Guam,
Puerto Rico, Virgin Islands
Philadelphia, PA 19255-0215
Foreign country, all APO
and FPO addresses
Austin, TX 73301-0215
H-10
| File Type | application/pdf |
| File Title | 2005 Form 1040 |
| Subject | U.S. Individual Income Tax Return |
| Author | SE:W:CAR:MP |
| File Modified | 2006-12-30 |
| File Created | 2006-12-30 |