Who are Household Employers
The IRS defines a “household employee” as a worker you pay who does household work under your control. It does not matter whether the work is full-time or part-time. It also does not matter whether you pay the worker on an hourly, daily or weekly basis or if you pay the worker by the job.
Who must Pay Household Employment Taxes?
You will be subject to employment taxes if you paid an employee more than certain amounts per quarter or tax year as set forth below.
- Pay the federal unemployment tax, or FUTAIf you pay total wages of $1,000 or more in any calendar quarter of the current year or previous year to household employees
- Withhold and/or pay federal Social Security and Medicare taxes, or FICA if you pay $3,000 or more to any one household employee in 2026.
- You are not required to withhold federal income tax from wages you pay to a household employee. You should withhold federal income tax only if your household employee asks you to withhold it and you agree.
- Depending on where you live, there may be state unemployment taxes that you must pay. To find out whether you will owe state unemployment tax, contact your state’s unemployment tax agency.
Social Security and Medicare taxes (FICA)
Social Security and Medicare taxes are 15.3 percent of an employee’s wages. The employer pays 7.65 percent (Social Security at 6.2 percent and Medicare at 1.45 percent), while the same amount can be withheld from the employee’s pay. If the employer may choose to pay the employee’s share of Social security and Medicare taxes. The amount must be included as wages for the purposes of the employees’ income tax. However, they do not count as Social Security and Medicare wages or as wages for federal unemployment tax.
Federal unemployment tax (FUTA)
If you have a household employee, you may also have to pay the federal unemployment tax, which is commonly
referred to as FUTA. The Federal Unemployment Tax Act (FUTA) is a 6% U.S. federal employer tax on the first $7,000 of employee wages, used to fund state workforce agency administrative costs and unemployment benefits. Employers can receive a credit of up to 5.4% for state unemployment taxes paid, reducing the net FUTA rate to 0.6% ($42 per employee per year). It is paid only by employers, not employees.
Required federal tax reporting forms
I-9 Employment Eligibility Verification Form I-9, Employment Eligibility Verification, to verify the identity and employment authorization of individuals hired for employment in the United States. All U.S. employers must properly complete Form I-9 for every individual they hire for employment in the United States.
SS-4 Application for Employer Identification Number Form SS-4 is the official application used to obtain an Employer Identification Number (EIN) from the IRS. This 9-digit number is required for businesses, corporations, partnerships, trusts, and estates to file taxes, hire employees, or open business bank accounts. The form can be submitted online, by mail, or by fax. You must use the EIN to file your state uneployment tax.
Schedule H Schedule H is required if you are subject to FICA or FUTA taxes, or if you pay wages from which you withheld federal income tax. You do not need to file forms 941 and 941 for the househomd employment taxes.
W-2 Wage and Tax Statement If you are subject to FICA taxes or withhold federal income tax from your employee’s wages, you must file a Form W-2 (Wage and Tax Statement) for your employee. You must send Copy A of Form W-2 along with Form W-3 to the Social Security Administration by the required due date. You must use the EIN to file Forms W2 and W3.