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Nanny Tax and Estimated Payments: Schedule H Guide

Checked October 17, 2026 · Educational summary

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General information, not tax or financial advice. We are not the IRS and are not affiliated with it. Check IRS.gov and consider a qualified tax professional. Sources were read on 17 October 2026 unless a line says "search extract"; anything marked expected is our reading of a rule, not a published date. Examples use made-up numbers and are fictional.

If you pay a household employee enough to owe employment taxes, you report them on Schedule H (Form 1040) with your 2026 return and add them to your income tax. Publication 926 says you can cover them during the year by asking your employer to withhold more, or by making estimated payments or increasing the ones you already make. The underpayment penalty can apply if you do neither, with one exception described below.

Who owes what in 2026

Publication 926 (2026) uses two thresholds. Pay cash wages of $3,000 or more in 2026 to any one household employee and you withhold and pay social security and Medicare taxes (15.3% in total, with a 7.65% employee share you may choose to pay yourself). Pay total cash wages of $1,000 or more in any calendar quarter of 2025 or 2026 and you pay FUTA tax (6% of the first $7,000 per employee, before any credit). For the $3,000 social security and Medicare test, the publication says not to count wages paid to your spouse, your child under 21, your parent (with an exception in some cases when the parent cares for your child) or an employee under 18 (unless household work is the employee's principal occupation; a student's household work is not treated as principal occupation). For the FUTA test, it says not to count wages paid to your spouse, your child under 21 or your parent; the under-18 rule is not listed there. These wages can still be subject to federal income tax if withheld, because withholding is optional for household employers.

The social security wage base for 2026 is $184,500 in that publication. Federal income tax withholding from a household employee is not required; you do it only if the employee asks and you agree.

How the tax reaches the IRS

You attach Schedule H to your Form 1040 (or 1040-SR, 1040-SS, 1040-NR or 1041) and the IRS says to pay the amount due by April 15, 2027. If you get an extension to file, the publication says it also applies to Schedule H. Employees' Forms W-2 are due to the employee and the SSA by February 1, 2027 in the same publication.

During the year, the publication lists these ways to avoid owing at filing time:

• Ask your employer for more federal income tax withholding in 2026 (new Form W-4). See raising W-4 withholding.
• Ask the payer of a pension or annuity to withhold more (Form W-4P).
• Make estimated payments with Form 1040-ES.
• Increase your payments if you already make them. You can pay all the employment taxes at once or in installments, and estimated payments for 2026 are due April 15, June 15 and September 15, 2026 and January 15, 2027.

The penalty exception

The publication warns you may be subject to the estimated tax underpayment penalty if you did not pay enough income and household employment taxes during the year. You are not subject to it if both of these apply: you have no federal income tax withheld from wages, pensions or other payments, and your income taxes, excluding household employment taxes, would not be enough to require estimated payments. In other words, a household employer with only a small income tax bill and no withholding may owe the Schedule H tax with the return and no penalty. If either condition fails, see the penalty guide and safe harbor rules.

Business owners have another choice: the publication says you can include household employment taxes with the deposits and returns for your business or farm employees instead of using Schedule H.

Fictional example

A household employer (made-up numbers) pays a nanny $18,000 in 2026, so social security and Medicare tax apply. The employer splits the 15.3% total between employee withholding and the employer share, and Schedule H adds the combined total to the Form 1040 tax. The employer has a salary with withholding, so the combined income and household tax is compared with total withholding. If a gap remains, a larger W-4 withholding amount for the rest of 2026 or a January 15, 2027 payment can close it.

FAQ

Is the nanny tax part of my estimated tax?

The Form 1040-ES says to include household employment taxes when you estimate your tax if you will have federal income tax withheld from wages, pensions or other income, or if you would have to make estimated payments anyway. Publication 926 describes more withholding or estimated payments as the two ways to pay during the year.

Do I owe a state tax too?

Possibly; the publication points to your state agency. We did not research any state.

What if the person is self-employed?

Publication 926 says that if only the worker can control how the work is done, the worker is not your employee but is self-employed; it also says a worker who provides childcare in their own home generally is not your employee. See its examples.

What we could not verify