How to Deal With Taxes for Household Help

Paying taxes for household help is an issue that has attracted a lot of scrutiny with the tightening of immigration laws. The Internal Revenue Service considers everyone working in or around your home as household employees. If you pay your household help over $1,000 in a calendar quarter, you are liable to pay federal unemployment tax.  The IRS publishes payment structures in their 926 Publication.

• Establish whether or not the person doing the job is actually your employee. This includes those working in your household, whom you pay on a regular basis. If your household help is from an employment agency, the agency has tax responsibility.


• Complete an Employment Eligibility Verification form (1-9). The form is important evidence that shows the employee can legally work in The United States.


• Review publication 926 to find out if what you are paying your household help requires you to pay taxes.


• Set aside the percentage required from the employee's wages to pay social security and Medicare tax. This money is paid directly to the IRS when filing your annual tax return.


• Prepare a Wage and Tax Statement (form W-2). Indicate your household helps wages at the end of a calendar year. Submit the relevant copies to the employee and the Social Security Administration. Keep a copy for your records.


• Prepare schedule H along with your annual tax return (1040). This form will help you to calculate the taxes you owe. Add the taxes you owe to your income tax liability.


• Withhold federal income taxes from your household help’s wages if he or she requests you to do so. For this, you will require an Employee’s Withholding Allowance Certificate and Publication (Form W-4).