A household employee tax checklist collects what a family that pays a nanny, caregiver or housekeeper needs at tax time: proof the worker is their employee, a record of each payday's wages and withholding, the family's EIN, the worker's W-4 and I-9, state unemployment filings, and the W-2 and W-3 the family issued. Schedule H is figured from those records.
Does the client have a household employee at all?
A household employee is a worker hired to do household work who is the family's employee rather than an agency's worker or an independent contractor. The family has one when it controls what work is done and how. Even then, federal employment taxes apply only once the family pays enough cash wages in the year.
IRS Publication 926 (Household Employer's Tax Guide, for use in 2026, last reviewed 30 April 2026) says "you have a household employee if you hired someone to do household work and that worker is your employee." It gives nannies, housekeepers, caretakers and private nurses as examples of household workers. The Instructions for Schedule H (2025) put the test this way: "What matters is that you had the right to control the details of how the work was done."
Agency placements are the common exception. Publication 926 says that if an agency provides the worker and controls what work is done and how, the worker is not the family's employee. Ask the client who hired the worker, who sets the schedule and who pays.
Once there is an employee, the thresholds decide whether taxes are owed. They differ by tax year:
- Tax year 2025. The Schedule H instructions say social security and Medicare taxes apply if the family paid one household employee $2,800 or more in cash wages in 2025.
- Tax year 2026. Publication 926 sets the threshold at $3,000 in cash wages paid to any one household employee in 2026.
- Federal unemployment (FUTA), both years. Publication 926 says FUTA applies when total cash wages to household employees reach $1,000 or more in any calendar quarter of 2025 or 2026.
Some workers' wages do not count toward social security, Medicare or FUTA. Publication 926 lists the family's spouse, the family's child under age 21, the family's parent (with a limited exception) and any employee under 18 during the year unless household work is that person's principal occupation. Put the worker's relationship to the family on the checklist so the preparer sees it.
Wage and payment records for the household employee
Wage and payment records for a household employee are the family's own payroll ledger: each pay date, gross cash wages, any in-kind pay such as meals or lodging, and every amount withheld. Families who pay a nanny by app transfer or cash often keep no ledger at all, so this is usually the item that takes longest to collect.
Publication 926 says the family should record, for each payday, the date and amounts of wages paid, employee taxes withheld and any federal or state income tax withheld. It also says to keep the employee's name, address and social security number. If the family pays $3,000 or more in 2026 social security and Medicare wages, or withholds federal income tax, the name and number should be recorded exactly as they appear on the worker's social security card, and the family should ask for the number no later than the first day it pays wages.
Ask the client for:
- A pay log with each pay date, hours if tracked, and gross pay.
- Bank or payment app records for every transfer to the worker, to back up the log.
- Cash payments written down with dates and amounts, since nothing else records them.
- Noncash pay, such as meals, lodging or a car, described with dates.
- Amounts withheld, if the family withheld anything.
Noncash pay is handled differently from cash. Publication 926 says noncash wages paid to household employees are not subject to social security or Medicare taxes, though they are still subject to federal income tax unless a specific exclusion applies. Keeping cash and noncash pay in separate columns keeps the totals honest.
Withholding the employee's share is a choice the family makes. Publication 926 says a family that expects to pay $3,000 or more in cash wages in 2026 should withhold the employee's share of social security and Medicare, but may choose to pay it itself instead. The checklist should record which the family did, because it changes what the W-2 shows.
An example household employee checklist
This is a filled-in example for a fictional family, the Okafors, who employed a nanny for all of 2026. Names and dates are examples.
| Record | Who produces it | Due date | Form it feeds |
|---|---|---|---|
| Employer identification number (EIN) | Family, from the IRS | Before the first W-2 is filed | Schedule H, Form W-2 |
| Form W-4 (only if income tax is withheld) | Employee | When withholding starts | Federal income tax withheld on W-2 |
| Form I-9 | Employee and family | Employee section by first day of work | Kept on file, not sent to the IRS |
| Pay log and payment app records | Family | Each payday | Schedule H, Form W-2 |
| State unemployment quarterly reports | Family or payroll service | Set by the state agency | Schedule H FUTA credit |
| Form W-2 and Form W-3 for 2026 | Family or payroll service | February 1, 2027 | Schedule H; employee's own return |
| Schedule H for 2026 | Preparer, from the records above | April 15, 2027, with Form 1040 | Form 1040 |
Household employee forms the family keeps on file
Household employee forms the family keeps on file are the EIN notice, the worker's Form W-4 if income tax is withheld, Form I-9, and copies of each year's Forms W-2 and W-3. The W-2 goes to the worker and the W-2 with the W-3 goes to the Social Security Administration by the date set for that tax year.
EIN. Publication 926 says the family must include its employer identification number on forms for its household employee, and that it can apply online at IRS.gov/EIN or by faxing or mailing Form SS-4. The Schedule H instructions say not to use a social security number in its place.
Form W-4. Publication 926 says a family is not required to withhold federal income tax from a household employee's wages. It withholds only if the employee asks and the family agrees, and then the employee must give the family a completed Form W-4.
Form I-9. Publication 926 says both the family and the employee complete Form I-9 when the family hires someone on a regular basis, with the employee's section done no later than the first day of work. The form stays in the family's records and is not sent to the IRS.
Forms W-2 and W-3. The deadline depends on the wage year:
- 2025 wages. The Schedule H instructions (2025) say to send Copy A of Forms W-2 with Form W-3 to the SSA by February 2, 2026, and to give the employee Copies B, C and 2 by the same date.
- 2026 wages. Publication 926 says to give the employee Copies B, C and 2 by February 1, 2027, and to file with the SSA by February 1, 2027.
How long to keep them. Publication 926 says to keep employment tax records for at least 4 years after the due date of the return or the date the taxes were paid, whichever is later. The Schedule H instructions name Schedule H and the related Forms W-2, W-3 and W-4 as records to keep.
State unemployment and new-hire filings for household employees
State unemployment and new-hire filings for household employees are the registrations and reports a family's state requires once it becomes an employer. The federal guidance points families to their state agency for these. For the tax file, collect the state account numbers, each quarterly report and proof of each payment.
Publication 926 says a family should "contact your state unemployment tax agency to find out whether you need to pay state unemployment tax." State rules on registration, quarterly wage reports and reporting a new hire differ, so the checklist asks for what the family actually filed rather than assuming.
State payments also affect the federal figure. The Instructions for Schedule H (2025) say the FUTA rate is 6.0% on the first $7,000 paid to each employee, with a credit of up to 5.4% for state contributions, and that to get the full credit for 2025 the family must pay all 2025 state contributions by April 15, 2026. Late state payments reduce the credit. So the dates on the state payment receipts matter, not only the amounts.
Ask the client for:
- The state unemployment account number and the registration confirmation.
- Each quarterly state report filed for the year, and proof of each payment with its date.
- State withholding registration, if the family withholds state income tax.
- A copy of any new-hire report the family filed with the state, and its date.
- Any notice from the state about rates or late filings.
How does Schedule H use the household employee records?
Schedule H uses the household employee records to figure the family's social security, Medicare, FUTA and any withheld federal income tax for the year. The pay log supplies the cash wages, the W-2 supplies withholding, and state receipts supply the FUTA credit. The family then covers the total through withholding from its own pay or estimated payments.
The Schedule H instructions say it is attached to Form 1040, 1040-SR, 1040-SS, 1040-NR or 1041. For 2025, a paper Schedule H is due April 15, 2026. Publication 926 gives April 15, 2027 for 2026. The instructions add that a family with household employees that is not otherwise required to file a return can file Schedule H by itself by that date.
Paying the tax during the year is the part families miss. The Schedule H instructions say household employment taxes can create an estimated tax penalty risk, and that a family can avoid it by increasing withholding from its own pay or pension, for example with a new Form W-4 to its own employer, or by making estimated payments with Form 1040-ES. Publication 926 lists the 2026 estimated payment dates as April 15, June 15 and September 15, 2026, and January 15, 2027.
That means the checklist also needs the family's own payment records:
- The family's own pay stubs showing any added withholding.
- Each Form 1040-ES payment for the year, with dates and amounts.
The post on confirming estimated payments before data entry covers how to check those against IRS records.
When a payroll service already ran the household employee's pay
When a payroll service already ran the household employee's pay, its year-end report replaces most of the family's own pay log. The service usually produced pay stubs, filed state reports and prepared the W-2. Collect its year-end summary, the W-2 and W-3 it filed and its record of tax deposits, and check them against the family's bank records.
The family stays on the hook either way. Publication 926 says a family that contracts with a third party remains responsible if the third party fails to perform any required action. So the firm still checks the service's output rather than taking it on trust.
Checks worth making on the year-end report:
- Wages match payments. Total gross wages should agree with what left the family's bank account, allowing for withholding.
- Every quarter is there. Four state quarterly reports, not three.
- The W-2 matches the report. Wages and withholding on the W-2 should equal the year-end totals.
- Deposits match the liability. The service's deposit record should cover the taxes it shows as due.
- Only the period it covered. If the family started the service mid-year, the months before it still need the family's own records.
The post on which payroll reports to collect from clients lists the standard reports a payroll provider produces. Schema CPA reads pay stubs and payroll provider reports along with the bank statements behind them, ties out statement balances month to month and calls out a gap in a run of statements; the documents section lists what it reads.
Other specialized lists take a similar shape: the real estate agent tax checklist for commission income, and the estate and trust tax organizer for a family that also serves as fiduciary.