Does The Household Employee Tax Apply To Me?

Do You Have a Household Employee?

Do you have someone working in your home providing housekeeping, maid, babysitting, gardening, or other services around your home?  If so, you may have a household employee according to the IRS.  Household workers are employees if the client controls not only the work they do, but also how they do it.

Repairmen, plumbers, contractors, and other businesspeople who provide their services as independent contractors, are not employees.

If you obtain household services through an agency and pay the agency, which then pays the worker, these workers are not considered household employees for tax purposes as they reside on the payroll of the agency.

Your Tax Responsibilities for Your Household Employee

As an employer, you are required to withhold Social Security and Medicare taxes on wages paid to your household employee when you pay $2,300 (2021) to your employee.  Federal and state unemployment taxes may also apply. 

Tax Filing Requirements

As an employer, you are required to submit the following tax reports:

  • Quarterly state income and state unemployment tax filings
  • Annual W-2’s are required to be filed by January 31st
  • Annually include Schedule H in your individual income tax return (Form 1040).  Any taxes due to the IRS with respect to your household employee will be reported on your individual income tax return.

If you think you may have a household employee and need assistance with your tax reporting requirements, please feel to reach out to us.  

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