Schedule H is the form you attach to your Form 1040 to report and pay employment taxes for a household employee, such as a nanny, housekeeper, cleaner or private carer. For 2025, Social Security and Medicare taxes apply once you pay one household employee $2,800 or more in cash wages, and federal unemployment (FUTA) tax applies if you paid $1,000 or more in cash wages to all household employees in any calendar quarter of 2024 or 2025.
It's often called the nanny tax, and it applies whether the person works full or part time and whether you pay by the hour, the day or the job. Everything below comes from the IRS Instructions for Schedule H (2025), checked in October 2026.
Is the worker your household employee?
If you hired someone to do household work and you could control what work they did and how they did it, they're your household employee. It doesn't matter if you gave them freedom of action, whether the work is hourly, daily, weekly or by the job, or whether you hired them through an agency or from an agency's list. The exception runs the other way: workers you get from an agency aren't your employees if the agency is responsible for who does the work and how it's done.
The IRS example: you pay Peyton to babysit your child and do light housework 4 days a week in your home, Peyton follows your instructions and you supply the equipment. Peyton is your household employee. Household workers include babysitters, caretakers, cleaning people, cooks, drivers, health aides, housekeepers, maids, nannies, private nurses and yard workers.
The 2025 thresholds and rates
| Item | 2025 figure, as of October 2026 |
|---|---|
| Social Security tax | 6.2% each for employee and employer, on wages up to $176,100 |
| Medicare tax | 1.45% each for employee and employer, no wage limit |
| Social Security and Medicare apply when | You pay one household employee $2,800 or more in cash wages in 2025 |
| FUTA applies when | Cash wages to all household employees were $1,000 or more in any calendar quarter of 2024 or 2025 |
| FUTA rate | 6.0% on the first $7,000 per employee, cut to a net 0.6% with the full 5.4% state credit |
FUTA is paid only by you, never taken from the employee's pay. To get the full 5.4% credit, you must pay all required state unemployment contributions for 2025 by April 15, 2026.
Wages that don't count
Cash wages paid to these people aren't counted for Social Security and Medicare:
- Your spouse.
- Your child under age 21.
- Your parent, unless the exception for parents applies, for example where they care for your child under 18 and you're divorced and not remarried, widowed, or married to someone whose condition prevented them from caring for the child for at least 4 continuous weeks in the quarter.
- An employee who was under age 18 at any time in 2025, unless household work was their principal occupation and they weren't a student.
Cash wages include wages paid by check and similar payments. They don't include the value of food, lodging, clothing, transit passes or other noncash items you give the employee, although cash given in place of those items does count.
What you need to do
- Get an employer identification number. You need an EIN to file Schedule H, and you can't use your Social Security number instead.
- Check the worker can legally work in the United States: you and the employee each complete part of USCIS Form I-9.
- Withhold the employee's share of Social Security and Medicare once you pass $2,800. If you didn't deduct it from their wages, the instructions say you must pay the employee's share yourself.
- Give Copies B, C and 2 of Form W-2 to the employee and send Copy A with Form W-3 to the Social Security Administration by February 2, 2026 for 2025 wages.
- Complete Schedule H and attach it to your Form 1040, due April 15, 2026, or the extended date if you got an extension.
- Avoid an estimated tax penalty by raising your own withholding with a new Form W-4, or by making estimated tax payments on Form 1040-ES.
If you don't have an EIN yet, Form SS-4 is the application. Our guide to the W-2 form explains the boxes your employee will see.
Records you must keep
Keep copies of Schedule H and the related Forms W-2, W-3 and W-4 for at least 4 years after the Schedule H due date or the date the taxes were paid, whichever is later. You'll also need each employee's name, address and Social Security number. Each payday, record the date and amount of the wages you paid, in cash and in kind, and any Social Security, Medicare, federal income tax and state employment taxes you withheld or agreed to pay for your employee.
When wages aren't subject to these taxes
If you withheld federal income tax from a household employee's pay, you must still file a W-2 for them even when the wages weren't subject to Social Security and Medicare tax. In that case you complete only boxes 1 and 2 and leave boxes 3 to 6 blank. The instructions warn that if wages were below $2,800 for 2025 and you fill in boxes 3 to 6 anyway, the SSA will reject the W-2.
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The verdict
If you pay a nanny, cleaner or carer directly and you set how the work is done, assume they're your employee. For 2025, the numbers to watch are $2,800 for one worker and $1,000 in any quarter for FUTA. Get an EIN early, put the W-2 date in your calendar, and budget for the tax through your own withholding so April doesn't bring a penalty as well as a bill.
Not every helper counts as a household employee, and our guide to the independent contractor form covers what applies to independent workers instead.
Frequently asked questions
What is Schedule H used for?
To report and pay Social Security, Medicare, FUTA and any withheld federal income tax for household employees, attached to your Form 1040.
What is the 2025 nanny tax threshold?
Social Security and Medicare taxes apply if you paid one household employee $2,800 or more in cash wages in 2025.
When do I owe FUTA tax for a household employee?
If you paid cash wages of $1,000 or more to all household employees in any calendar quarter of 2024 or 2025.
Is a nanny from an agency my household employee?
It depends who's in control. If you control what work they do and how, they're your household employee even if an agency found them. If the agency is responsible for who does the work and how it's done, they aren't.
Do I need an EIN for Schedule H?
Yes. You need an employer identification number to file Schedule H, and you can't use your Social Security number in its place.
Do wages paid to my child count?
Not if your child was under age 21. Wages paid to your spouse also don't count.
