Free 2008 Instruction 1040 Schedule H - Federal

Department of the Treasury Internal Revenue Service

2008 Instructions for Schedule H (Form 1040) Household Employment Taxes Household Employers
Here is a list of forms you need to complete:
· 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.
For more information, see What Forms Must You File? in Pub. 926, Household Employer's Tax Guide.
No household employees in 2008? If you did not have any household employees in 2008, you do not have to file Schedule H (Form 1040) for 2008.

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 2008 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 15, 2009. 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

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Contents

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Form W-2 and Form W-3 . . . . . . . . . . . . . . . H-5 The Basics . . . . . . . . . . . . . . . . . . . . . . . . . . H-2 What's New . . . . . . . . . . . . . . . . . . . . . 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? . . . . . . H-2 . . . . H-2 . . . . H-2 . . . . H-2 . . . . H-3 . . . . H-3 You Should Also Know . . . . . . . . . . . . . . . . . H-5 What's New for 2009 . . . . . . . . . . . . . . . Estimated Tax Penalty . . . . . . . . . . . . . . . What Records To Keep . . . . . . . . . . . . . . What Is the Earned Income Credit (EIC)? . Rules for Business Employers . . . . . . . . . State Disability Payments . . . . . . . . . . . . How To Correct Schedule H . . . . . . . . . . How To Get Forms and Publications . . . . Privacy Act and Paperwork Reduction Act Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-5 . H-6 . H-6 . H-6 . H-6 . H-6 . H-6 . H-7

. . . H-7

When and Where To File . . . . . . . . . . . . . . . H-3 Schedule H . . . . . . . . . . . . . . . . . . . . . . . . . H-3 Form W-2 and Form W-3 . . . . . . . . . . . . . . . H-3 How To Fill In Schedule H, Form W-2, and Form W-3 . . . . . . . . . . . . . . . . . . . . . . . . . H-3 Schedule H . . . . . . . . . . . . . . . . . . . . . . . . . H-3 Completed Example of Schedule H, Form W-2, and Form W-3 . . . . . . . . . . . . . . . . . H-7

Contact List for State Unemployment Tax Agencies . . . . . . . . . . . . . . . . . . . . . . . . . H-10

H-1
Cat. No. 21451X

Important Dates!
By . . . . . . . . . . . . . You must . . . . . . . . . . . . . . . . . . .

Babysitters Caretakers Cleaning people

Drivers Health aides Housekeepers

Nannies Private nurses Yard workers

February 2, 2009 March 2, 2009 (March 31, 2009, if you file electronically) April 15, 2009 (see page H-3 for exceptions)

Give your employee Form W-2. Send Copy A of Form W-2 with Form W-3 to the Social Security Administration. File Schedule H and pay your household employment taxes with your 2008 tax return.

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 does not matter if the wages paid are for work done hourly, daily, weekly, or by the job.
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.

The Basics
What's New
Paid preparers may be required to sign Schedule H. Your paid

For 2008, you can generally give your employee transportation benefits such as transit passes worth up to $115 per month without the benefits counting as cash wages. However, the value of benefits over $115 a month is included as wages. See Transportation (Commuting) Benefits in Pub. 15-B, Employer's Tax Guide to Fringe Benefits, for more information.

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preparer must sign Schedule H in Part IV unless you are attaching Schedule H to form 1040, 1040NR, 1040-SS, or Form 1041. A paid preparer must sign Schedule H and provide the information requested in the Paid Preparer's Use Only section if the preparer was paid to prepare Schedule H and is not your employee. The preparer must give you a copy of the return in addition to the copy to be filed with the IRS.

Calendar quarter. A calendar quarter is January through March, April through June, July through September, or October through December. Workers who are not your employees. Workers you get from an 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. 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.

Reminder
If you must file a 2008 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. You are encouraged to file your Forms W-2 and W-3 electronically. Visit the Social Security website at www.socialsecurity.gov/employer to learn about electronic filing.

For more information, see Pub. 926, Household Employer's Tax Guide.

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.
Only 8 lines for most people. Depending on your answers, you may

Who Needs To File Form W-2 and Form W-3?
You must file Form W-2 for each household employee to whom you paid $1,600 or more of cash wages in 2008 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. If you file one or more Forms W-2, you must also file Form W-3.

find that you only have to complete lines A, 1 through 4, 6, 8, and 9.
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.
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.

Do You Have an Employer Identification Number (EIN)?
If you do not have an EIN, see Form SS-4, Application for Employer Identification Number. The Instructions for Form SS-4 explain how you can get an EIN immediately over the internet or by telephone, in 4 business days by fax, or in about 4 weeks if you

Household work is work done in or around your home. Some examples of workers who do household work are:

H-2

apply by mail. See How To Get Forms and Publications on page H-7 for details on how to get forms and publications including Form SS-4. Do not use a social security number in place of an EIN.

money order. Household employers that are tax-exempt, such as churches, may also file Schedule H by itself.

Can Your Employee Legally Work in the United States?
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.

Form W-2 and Form W-3
By February 2, 2009, 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 February 2, 2009. By March 2, 2009, (March 31, 2009, 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 2008, you probably have to pay contributions to your state unemployment fund for 2008. To find out if you do, contact your state unemployment tax agency right away. See page H-10 for some helpful contact information for each state. You should also find out if you need to pay or collect other state employment taxes or carry workers' compensation insurance. See the Appendix in Pub. 926 for a complete listing of contact information for state unemployment tax agencies.

CAUTION

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If you file Forms W-2 and W-3 electronically, do not mail the paper Forms W-2 and W-3 to the Social Security Administration.

For additional information, visit the website for Social Security at www.socialsecurity.gov/employer/whereto.htm.
Note. Check with your state, city, or local tax department to find out if you must send Copy 1 of Form W-2 and where to file Copy 1. 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 by the due dates shown above. 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
If you file Forms 1040, 1040NR, 1040-SS, or 1041 for 2008, remember to attach Schedule H to it. Mail your return, by April 15, 2009, to the address shown in your tax return booklet.
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. Note. If you are a calendar year taxpayer and have no household

How To Fill In Schedule H, Form W-2, and Form W-3
Schedule H
CAUTION

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employees for 2008, you do not have to file Schedule H (Form 1040) for 2008. If you are not required to file a 2008 tax return (for example, because your income is below the amount that requires you to file), you must file Schedule H by April 15, 2009. Complete Schedule H and put it in an envelope with your check or money order. Do not send cash. See the list of filing addresses on page H-11. 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 "2008 Schedule H" on your check or

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 1041 filers, do not enter a number in this space. But be sure to enter your EIN in the space provided.) Employer identification number (EIN). An EIN is a nine-digit

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.

H-3

Line A. To figure the total cash wages you paid in 2008 to each

household employee, do not count amounts paid to any of the following individuals. · 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 2008. 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. 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.
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.

15 (Circular E), Employer's Tax Guide, for information on withholding federal income taxes.
Line 6. Add lines 2, 4, and 5 and enter the result on line 6. Line 7. Enter on line 7, any advance EIC payments you made to

your household employees in 2008.
Line 8. Subtract the amount on line 7 from the amount on line 6 and

enter the result on line 8.
Line 9. Review the cash wages you paid to all your household

employees for each calendar quarter of 2007 and 2008. Is the total for any quarter in 2007 or 2008 $1,000 or more? Yes. Complete Part II of Schedule H. No. Follow the instructions in the chart below.
If you file Form. . . Then enter the amount from Schedule H, line 8, on. . .

1040 1040NR 1040-SS 1041

line 60 and check box b line 56 Part I, line 4 Schedule G, line 6

Part I. Social Security, Medicare, and Federal Income Taxes
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. For 2008, the limit on wages subject to social security tax is $102,000. There is no limit on wages subject to the Medicare tax. 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. $1,600 test. If you pay a household employee $1,600 or more in cash wages during 2008, you must report and pay social security and Medicare taxes. The test applies to cash wages paid in 2008 regardless of when the wages were earned. See Pub. 926 for more information. Or, visit the website for Social Security at www. socialsecurity.gov/pubs/10021.html.
Line 1. Enter on line 1 the total of cash wages (see Cash wages on

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.

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. 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. See page H-10 for a listing of some helpful contact information for each state.
Credit for contributions paid to state. You may be able to take a 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 2008 to your state unemployment fund by April 15, 2009. Fiscal year filers must pay all required contributions for 2008 by the due date of their federal income tax returns (not including extensions).

page H-2) paid in 2008 to each household employee who meets the $1,600 test, explained above.

CAUTION

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If you paid any household employee cash wages of more than $102,000 in 2008, include on line 1 only the first $102,000 of that employee's cash wages.

Line 2. Multiply the amount on line 1 by 12.4% (.124) and enter the result on line 2. Line 3. Enter on line 3 the total of cash wages (see Cash wages on page H-2) paid to each employee in 2008. There is no limit on wages subject to the Medicare tax. Line 4. Multiply the amount on line 3 by 2.9% (.029) and enter the

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 payments 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 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 2008 by the due date of your return (not including extensions), check the "Yes" box on line 11. Check the "No" box if you did not pay all of your state contributions by the due date of your return.

result on line 4.
Line 5. Enter on line 5 any federal income tax you withheld from

the wages you paid to your household employees in 2008. See Pub.

H-4

Line 13. Enter the two-letter abbreviation of the name of the state (or the District of Columbia, Puerto Rico, or the U.S. Virgin Islands) to which you paid unemployment contributions. Line 14. Enter your state reporting number. If you do not have one, contact your state's unemployment tax agency. See the Appendix in Pub. 926 for your state's contact information. Line 15. Enter the total of contributions (defined earlier) you paid

Line 27. Add the amounts on lines 17 and 26. If you were required

to complete Section B, of Part II, add the amounts on lines 25 and 26 and enter the total on line 27.
Line 28. Follow the instructions in the chart below. Then do not complete Part IV but enter the amount from Schedule H, line 27, on . . .

to your state unemployment fund for 2008. If you did not have to make contributions because your state gave you a zero percent experience rate, enter "0% rate" on line 15.
Line 16. Enter the total of cash wages (see Cash wages on page H-2) you paid in 2008 to each household employee, including employees paid less than $1,000. However, do not include cash wages paid in 2008 to any of the following individuals. · Your spouse. · Your child who was under age 21. · Your parent.

If you file Form. . .

1040 1040NR 1040-SS 1041

line 60 and check box b line 56 Part I, line 4 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.

If you paid any household employee more than $7,000 in 2008, include on line 16 only the first $7,000 of that employee's cash wages.

Paid Preparers
Paid preparer's use only. You must complete this part if you were paid to prepare Schedule H (Form 1040), and are not an employee of the filing entity, and are not attaching Schedule H to Form 1040, 1040NR, 1040-SS, or Form 1041. You must sign in the space provided and give the filer a copy of the return in addition to the copy to be filed with the IRS.

CAUTION

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Complete lines 18 through 25 only if you checked a "No" box on lines 10, 11, or 12.

Line 18. Complete all columns that apply. If you do not, you will

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. See page H-10 for a listing of some helpful contact information for each state. 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 of contributions (defined earlier) you paid to the state unemployment fund for 2008 by April 15, 2009. Fiscal year filers, enter the total contributions you paid to the state unemployment fund for 2008 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 19. Add the amounts in columns (h) and (i) separately and enter the totals in the spaces provided. Line 20. Add the amounts shown on line 19 and enter the total on

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 all of your employee's share of social security and Medicare taxes, without deducting them from the employee, follow steps 1 through 3. (See the example on pages H-7, H-8, and H-9.)

1. Enter the amounts you paid on your employee's behalf in boxes 4 and 6 (do not include your share of these taxes). 2. Add the amounts in boxes 3, 4, and 6. (However, if box 5 is greater than box 3, then add the amounts in boxes 4, 5, and 6.) 3. Enter the total in box 1.

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On Form W-3, put an "X" in the "Hshld. emp." box located in box b, Kind of Payer.

For information on filing Forms W-2 and W-3 electronically, visit the website for Social Security, Business Services Online, at www.socialsecurity.gov/bso/bsowelcome.htm.

line 20.
Line 24. Enter the smaller of line 20 or line 23.

You Should Also Know
What's New for 2009
Changes to tax rates and wage threshold. The tax rates mentioned

Part III. Total Household Employment Taxes
Line 26. Enter the amount from line 8. If there is no entry on line 8,

enter -0-.

in the instructions for Part I and Part II of Schedule H will not

H-5

change. However, the cash wage threshold that you pay to any one household employee increases to $1,700 for 2009. The 2009 Employee Social Security and Medicare Tax Withholding Table is in Pub. 926, Household Employer's Tax Guide.
Limit on wages subject to social security tax. The $102,000 amount in the instructions for Part I of Schedule H will increase to $106,800. Transportation (commuting) benefits. The monthly exclusion for commuter highway vehicle transportation and transit passes increases to $120.

because the income tax withholding tables showed that no tax should be withheld.
Note. You are encouraged to notify each employee whose wages for 2008 were less than $38,646 ($41,646 if married filing jointly) that he or she may be eligible for the EIC. 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. · 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. · Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC). · Your written statement with the same wording as Notice 797.

Estimated Tax Penalty
You may need to increase the federal income tax withheld from your pay, pension, annuity, etc. or make estimated tax payments to avoid an estimated tax penalty based on your household employment taxes shown on line 27 of Schedule H. 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 Pub. 505, Tax Withholding and Estimated Tax.

If you are not required to give the employee a Form W-2, you must provide the notification by February 9, 2009. You must hand the notice directly to the employee or send it by First-Class Mail to the employee's last known address.
How do my employees claim the EIC? Eligible employees claim

the EIC on their 2008 tax returns.
How do my employees get advance EIC payments? Eligible em-

Estimated tax payments must be made as the tax liability is incurred: by April 15, June 15, September 15, and the following January 15. If you file your Form 1040 by CAUTION January 31 and pay the rest of the tax that you owe, you do not need to make the payment due on January 15.

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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.

ployees 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 or Form W-5(SP), its Spanish translation. 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 Pub.15 (Circular E), Employer's Tax Guide.

Rules For Business Employers
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, Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, or Form 944, Employer's ANNUAL Federal Tax Return. If you report this way, be sure to include your household employees' wages on your Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return.

What Records To Keep
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. · Any employee social security tax withheld. · Any employee Medicare tax withheld. · Any federal income tax withheld. · Any advance EIC payments you made.

State Disability Payments
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 payments on lines 1 and 3 of Schedule H 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.

What Is the Earned Income Credit (EIC)?
The EIC is a refundable tax credit for certain workers.
Which employees must I notify about the EIC? You must notify

How To Correct Schedule H
If you discover an error on a Schedule H that you previously filed with Form 1040, 1040NR, or Form 1040-SS, file Form 1040X and attach a corrected Schedule H. If you discover an error on a Sched-

your household employee about the EIC if you agreed to withhold federal income tax from the employee's wages but did not do so

H-6

ule H that you previously filed with Form 1041, file an "Amended" Form 1041 and attach a corrected Schedule H. If you discover an error on a Schedule H that you filed as a stand-alone return, file another stand-alone Schedule H with the corrected information. In the top margin of your corrected Schedule H write (in red) "ADJUSTED" followed by the date you discovered the error. If you owe tax, pay in full with your Form 1040X, Form 1041, or stand-alone Schedule H. If you overpaid tax on a previously filed Schedule H, you must certify that you repaid or reimbursed the employee's share of social security and Medicare taxes. See Pub. 926, Household Employer's Tax Guide, for complete instructions.

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-6526, 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
On February 7, 2008, Susan Green hired Helen Maple to clean her house every Wednesday. Susan did not have a household employee in 2007 and had no household employees other than Helen during 2008. 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. 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.

Privacy Act and Paperwork Reduction Act Notice
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. If you do not provide the information we ask for, or provide false or fraudulent information, you may be subject to penalties. 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. 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 taxpayers and paid preparers to provide their identification numbers. 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, the District of Columbia, and U.S. commonwealths and possessions to administer 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. 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. Recordkeeping, 1hr., 38 min.; Learning about the law or the form, 1 hr., 1min.; Preparing the form, 1 hr., 9 min.; Copying, assembling, and sending the form to the IRS, 34 min.

Helen's total cash wages . . . . . Helen's share of the: Social security tax . . . . . . 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)) ($50 ($50 ($50 ($50 x x x x 7 weeks) 13 weeks) 13 weeks) 13 weeks)

Helen's total cash wages each quarter: 1st quarter . . . . . . . . . . . $350.00 2nd quarter . . . . . . . . . . $650.00 3rd quarter . . . . . . . . . . . $650.00 4th quarter . . . . . . . . . . . $650.00

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 Because Susan paid less than $1,000 per quarter to household employees during 2007 (no employees) and 2008 (see above), she is not liable for FUTA tax.

TIP
H-7

See Pub 926 for an example showing how to complete Schedule H and Forms W-2 and W-3 if the employer withheld social security and Medicare taxes from the employee's wages.

SCHEDULE H (Form 1040)
Department of the Treasury Internal Revenue Service (99)

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.

OMB No. 1545-1971

Attachment Sequence No.

2008
44
1 1 1 1

Name of employer

Social security number

0 0 0

11

Susan Green

Employer identification number

0 0 1

2 3 4 5 6 7

A

Did you pay any one household employee cash wages of $1,600 or more in 2008? (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-4 before you answer this question.) Yes. Skip lines B and C and go to line 1. No. Go to line B.

Part I
1 2 3 4 5 6 7 8 9

Social Security, Medicare, and Federal Income Taxes
1
2, 3 0 0 00

Total cash wages subject to social security taxes (see page H-4) Social security taxes. Multiply line 1 by 12.4% (.124) Total cash wages subject to Medicare taxes (see page H-4) Medicare taxes. Multiply line 3 by 2.9% (.029) Federal income tax withheld, if any

2 3
2, 3 0 0 00

285

20

4 5 6 7 8

66 70

Total social security, Medicare, and federal income taxes (add lines 2, 4, and 5) Advance earned income credit (EIC) payments, if any Net taxes (subtract line 7 from line 6)

351

90

351

90

Did you pay total cash wages of $1,000 or more in any calendar quarter of 2007 or 2008 to all household employees? (Do not count cash wages paid in 2007 or 2008 to your spouse, your child under age 21, or your parent.) No. Stop. Include the amount from line 8 above on Form 1040, line 60, and check box b on that line. If you are not required to file Form 1040, see the line 9 instructions on page H-4.

H-8

Note: Although not shown, Susan also enters on Form W-2 the required state or local income tax information in boxes 15 through 20.

Visit the SSA website at www.socialsecurity.gov/employer to file Copy A of Form W-2 electronically.
For Official Use Only OMB No. 1545-0008 1 Wages, tips, other compensation 2 Federal income tax withheld

22222

a Employee's social security number Void

000-00-4567

b Employer identification number (EIN)

00-1234567
c Employer's name, address, and ZIP code 3

2475.95
Social security wages 4 Social security tax withheld

Susan Green 16 Gray Street Anyplace, CA 92665
d Control number

2300.00
5 Medicare wages and tips 6

142.60
Medicare tax withheld

2300.00
7 Social security tips 8 9 Advance EIC payment 10

33.35
Allocated tips Dependent care benefits

e Employee's first name and initial

Last name

Suff. 11 13

Nonqualified plans
Statutory employee Retirement plan Third-party sick pay

Helen R. 19 Pine Avenue Anycity, CA 92666

Maple
14 Other

C o d e C o d e

12a See instructions for box 12

12b

12c
C o d e

12d
C o d e

f Employee's address and ZIP code 15 State Employer's state ID number 16 State wages, tips, etc. 17 State income tax 18 Local wages, tips, etc. 19 Local income tax 20 Locality name

Form

W-2

Wage and Tax Statement

Copy A For Social Security Administration -- Send this entire page with Form W-3 to the Social Security Administration; photocopies are not acceptable.

2008

Department of the Treasury--Internal Revenue Service For Privacy Act and Paperwork Reduction Act Notice, see back of Copy D. Cat. No. 10134D

33333
b

a

Control number

For Official Use Only OMB No. 1545-0008 943 Medicare govt. emp. 944 Third-party sick pay 1 Wages, tips, other compensation 2 Federal income tax withheld

941

Military Hshld. emp.

Kind of Payer
c

2475.95
3 Social security wages 4 Social security tax withheld

CT-1

X
d Establishment number 5 7

2300.00
Medicare wages and tips 6

142.60
Medicare tax withheld

Total number of Forms W-2

2300.00
e Employer identification number (EIN) Social security tips 8 Allocated tips

33.35
10 Dependent care benefits

00-1234567
f Employer's name

Susan Green 16 Gray Street Anyplace, CA 92665

9

Advance EIC payments

11

Nonqualified plans

12

Deferred compensation

13

For third-party sick pay use only

14 g h Employer's address and ZIP code Other EIN used this year

Income tax withheld by payer of third-party sick pay

15

State

Employer's state ID number

16

State wages, tips, etc.

17

State income tax

18

Local wages, tips, etc.

19

Local income tax

Contact person

Telephone number

For Official Use Only

(
Email address

123 )
)

456-7890

Fax number

(

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

Title

Date

1/29/09
Department of the Treasury Internal Revenue Service

Form

W-3 Transmittal of Wage and Tax Statements

2008

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).

Do not round money amounts--show the cents portion.

H-9

Contact List for State Unemployment Tax Agencies
See the Appendix in Pub. 926, Household Employer's Tax Guide for complete contact information.
State Telephone Web Address

Alabama . . . . . . . . Alaska . . . . . . . . . . Arizona . . . . . . . . . Arkansas . . . . . . . . California . . . . . . . . Colorado . . . . . . . . Connecticut . . . . . . Delaware . . . . . . . . District of Columbia Florida . . . . . . . . . . Georgia . . . . . . . . . Hawaii . . . . . . . . . . Idaho . . . . . . . . . . . Illinois . . . . . . . . . . Indiana . . . . . . . . . Iowa . . . . . . . . . . . Kansas . . . . . . . . . . Kentucky . . . . . . . . Louisiana . . . . . . . . Maine . . . . . . . . . . Maryland . . . . . . . . Massachusetts . . . . . Michigan . . . . . . . . Minnesota . . . . . . . Mississippi . . . . . . . Missouri . . . . . . . . Montana . . . . . . . . Nebraska . . . . . . . . Nevada . . . . . . . . . New Hampshire . . . New Jersey . . . . . . New Mexico . . . . . New York . . . . . . . North Carolina . . . . North Dakota . . . . . Ohio . . . . . . . . . . . Oklahoma . . . . . . . Oregon . . . . . . . . . Pennsylvania . Puerto Rico . . Rhode Island . South Carolina South Dakota . Tennessee . . . Texas . . . . . . Utah . . . . . . . Vermont . . . . Virginia . . . . . Virgin Islands . Washington . . West Virginia . Wisconsin . . . Wyoming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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(334) 242-8830 . . . . . . . (888) 448-3527 . . . . . . . (602) 771-6601 . . . . . . . (501) 682-3798 . . . . . . . (888) 745-3886 . . . . . . . (800) 480-8299 . . . . . . . (860) 263-6550 . . . . . . . (302) 761-8484 . . . . . . . (202) 698-7550 . . . . . . . (800) 482-8293 . . . . . . . (404) 232-3301 . . . . . . . (808) 586-8913 . . . . . . . (800) 448-2977 . . . . . . . (800) 247-4984 . . . . . . . (317) 232-7436 . . . . . . . (515) 281-5339 . . . . . . . (785) 296-5027 . . . . . . . (502) 564-2272 . . . . . . . (225) 342-2944 . . . . . . . (207) 621-5120 . . . . . . . (800) 492-5524 . . . . . . . (617) 626-5050 . . . . . . . (313) 456-2180 . . . . . . . (651) 296-6141 . . . . . . . (866) 806-0272 . . . . . . . (573 751-3340 . . . . . . . . (406) 444-3834 . . . . . . . (402) 471-9935 . . . . . . . (775) 684-6300 . . . . . . . (603) 228-4033 . . . . . . . (609) 633-6400 . . . . . . . (505) 841-8576 . . . . . . . (518 )457-4179 . . . . . . . (919) 733-7396 . . . . . . . (701) 328-2814 . . . . . . . (614) 466-2319 . . . . . . . (405) 557-7143 . . . . . . . (503) 947-1488, option 5 (503) 947-1537 FUTA . . (717) 787-7679 . . . . . . . (787) 754-5818 (401) 574-8700 . . . . . . . (803) 737-3075 . . . . . . . (605) 626-2312 . . . . . . . (615) 741-2486 . . . . . . . (512) 463-2700 . . . . . . . (801) 526-9400 . . . . . . . (802) 828-4252 . . . . . . . (804) 371-7159 . . . . . . . (340) 776-1440 . . . . . . . (360) 902-9360 . . . . . . . (304) 558-2676 . . . . . . . (608) 261-6700 . . . . . . . (307) 235-3217 . . . . . . .

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www.dir.alabama.gov www.labor.state.ak.us www.azdes.gov/esa/uitax/uithome.asp www.state.ar.us/esd www.edd.cahwnet.gov www.coworkforce.com www.ctdol.state.ct.us www.delawareworks.com www.dcnetworks.org http://dor.myflorida.com/dor/uc www.dol.state.ga.us www.hawaii.gov/labor www.labor.state.id.us www.ides.state.il.us www.in.gov/dwd www.iowaworkforce.org/ui www.dol.ks.gov www.oet.ky.gov www.laworks.net/homepage.asp www.state.me.us/labor www.dllr.state.md.us www.detma.org www.michigan.gov/uia www.uimn.org/tax www.mdes.ms.gov www.dolir.mo.gov www.uid.dli.mt.gov www.dol.state.ne.us https://uitax.nvdetr.org www.nhes.state.nh.us http://lwd.dol.state.nj.us www.dws.state.nm.us www.labor.state.ny.us www.ncesc.com www.jobsnd.com www.jfs.ohio.gov www.oesc.state.ok.us

. . . . . . . . . . . . . . . www.oregon.gov/EMPLOY/TAX . . . . . . . . . . . . . . . www.dli.state.pa.us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

www.uitax.ri.gov www.sces.org/ui www.state.sd.us www.state.tn.us/labor-wfd/esdiv.html www.twc.state.tx.us www.jobs.utah.gov www.labor.vermont.gov www.VaEmploy.com www.vidol.gov www.esd.wa.gov/uitax/index.php www.wvbep.org/bep/uc www.dwd.state.wi.us http://wydoe.state.wy.us

H-10

Do You Have To File Form 1040, 1040NR, 1040-SS, or Form 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 Department of the Treasury, Internal Revenue Service Center 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... Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, Vermont Kentucky, Louisiana, Mississippi, Tennessee, Texas Alaska, Arizona, California, Colorado, Hawaii, Idaho, Illinois, Iowa, Kansas, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington, Wisconsin, Wyoming Arkansas, Connecticut, Delaware, Indiana, Michigan, Missouri, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, West Virginia APO, FPO, American Samoa, the Commonwealth of the Northern Mariana Islands, nonpermanent residents of Guam or the Virgin Islands*, Puerto Rico, dual-status aliens, a foreign county

THEN use this address... Atlanta, GA 39901 ­ 0002 Andover, MA 05501 ­ 0002 Austin, TX 73301 ­ 0002 Fresno, CA 93888 ­ 0002

Kansas City, MO 64999 ­ 0002

Austin, TX 73301 ­ 0215 USA

* Permanent residents of Guam should use: Department of Revenue and Taxation, Government of Guam, P.O. Box 23607, GMF, GU 96921; permanent residents of the Virgin Islands should use: V.I. Bureau of Internal Revenue, 9601 Estate Thomas, Charlotte Amalie, St. Thomas, VI 00802.

H-11
Printed on recycled paper