Household Employee Info

[lisaskwok]

My payroll has given me a Schedule H to file with my tax return. In Turbo tax it says to enter Social Security and Medicare tax withheld by state (withholding on state disability payments) - I'm confused is this just the social and Medicare tax withholding total? What line is that in Schedule H?

[AmyC]

The confusing part -Social Security and Medicare tax withheld by state on state disability payments. The TurboTax question does not explain that this question is only for a few specific states that require state disability insurance be withheld from the employees paycheck. They are CA, HI, NJ, NY, RI and PR. If you do not live in one of those states, enter zero. If you do, enter the amount that was withheld from your employee's paycheck.

While the state amount for SDI/ TDI does not go on Sch H, the program is looking for which state with which rules may have some other application for you.

Reference: What is Sch H

[SCurling1]

Did you get your question answered about the Schedule H?

My initial question is why did payroll provide you with a Sched-H unless you requested the form?

The schedule H is for in-home employment (such as hiring a nanny, care provider, etc.)

I file the Sched-H every year, because I pay someone to care for my special needs adult son.  I can probably answer your questions if you still need assistance.

[Mishonio]

Product: TT Online Premium 2025

I am in CA and we had a nanny for a few months in 2025 to look after our kids. When answering this same question "Social Security and Medicare tax withheld by state (withholding on state disability payments)" regarding schedule H, do I use line items 2 and 4 below OR something else?

My observation is that the amount I type when answering this question doesn't impact the CA taxes. It impacts the Federal tax though - the lower the amount, the higher the federal tax and vice versa. 

Thanks

M

[SCurling1]

Use the lines you have entered.  #2,4,& 7.

This looks correct to me.   

These taxes are all federal related.  You wait (accumulate them through out the year as you pay your nanny) and pay them with your 1040 return, as they are calculated and included with your entire 1040 return.

These taxes (all federal) would not impact your state return.  If CA is like the other states in which I have paid for household employees (VA and KY) , you would pay state taxes throughout the employed time frame on a monthly or quarterly basis, (required by the state).  The state wants their taxes monthly or quarterly, but the Federal gov't. has us wait and pay with our 1040 filing.

This is really the easiest way to pay the Federal tax, by "banking" those taxes and paying them with the 1040 filing.

I use Quickbooks for my payroll, and I take these numbers right off the QB Employee Payroll Report for the previous year.

The report also shows the payment I made toward "employer tax payments", such as State unemployment.  I realize you may not use QB.

[SCurling1]

Not to divert from this thread,  but has anyone found information on taking business expenses for Schedule-H expenses, or are all cost considered out-of-pocket?

The gov't.  has us get a "business identification number (EIN)", but I have never seen any information on applicable business deductions.  I pay for employee workman's comp. insurance which is not cheap, and I think should be a legitimate business expense, not to mention all the incidental expenses involved with hiring an employee.

[ThomasM125]

Business expenses are only deductible against business income. Hiring a domestic worker is not a business since you are not generating income, so the expenses are not deductible.

@SCurling1 

[Mishonio]

@AmyC thank you for the response

We are in California and have to answer this confusing question: "Social Security and Medicare tax withheld by state (withholding on state disability payments)"

If I enter zero, my Federal Taxes due go up by about $2K?

Since I didn't know any better I entered the schedule H line items 2 and 4 - even though these were not withheld by the state. 

If I understand correctly, I should enter here just the actual SDI/ TDI amount that was withheld from our employee's paycheck? Is this correct? If so, where to find this amount?

Thank you!

Michael

[DaveF1006]

It depends. When you entered the amounts from Schedule H, Lines 2 and 4 into that field, it told the IRS that you already paid these Federal Social Security and Medicare taxes to the State of California.  

You were then given a credit for those amounts, lowering your tax bill. When you changed it back to zero, the software removed that credit, causing your "Tax Due" to jump back up to where it actually should be. The $2K increase isn't a penalty; it’s the software correcting a mistake where it thought you had already pre-paid those taxes elsewhere.

In California, you almost never withhold Social Security or Medicare to pay to the state. Those are Federal taxes paid to the IRS. The only time you enter something in that specific box is if you were required to withhold California State Disability Insurance (SDI) or Paid Family Leave (PFL) from your employee.

1. The mistake is entering Schedule H Lines 2 and 4 (which are Federal Social Security and Medicare). 
2. To correct it, you should only enter the actual SDI/TDI amount withheld from the employee's check for California.

Where do I find the correct SDI amount?

If you are a household employer in California, you are required to withhold SDI if you paid the employee $750 or more in a calendar quarter. To find the exact number:

• Payroll Records: Look at the pay stubs you gave your employee. There should be a line item for CA-SDI. 
• Form DE 9 / DE 9C: If you file quarterly reports with the California EDD (Employment Development Department), look at your quarterly filings. The SDI amount is usually listed there.
• The Math: For 2025/2026, the CA SDI rate is 1.2% of gross wages. If you paid your employee $50,000, the SDI withheld would be $600.

To summarize.

1. Do NOT enter Schedule H Line 2 or 4 amounts here. 
2. DO enter the total CA SDI amount you withheld from your employee's paychecks throughout the year.

If you didn't withhold SDI (e.g., if you paid it yourself as a benefit or didn't reach the $750/quarter threshold), then Zero is actually the correct answer, and your tax bill is simply reflecting the Federal employer taxes you owe.

[Mishonio]

Thank you @DaveF1006 

I am using TT online premium and it doesn't ask me this question anymore - so I don't know how to change my prior reply as you suggested. Please advise. Need to file today 

thanks!!!

M 

[DaveF1006]

In TurboTax Premium, use these steps to correctly report the SDI tax.

1. Federal
2. Other tax situations>Nanny and Household Employee Tax.
3. Scroll to a screen called Employee wages and withholding
4. Now look for a line that says “Social Security and Medicare tax withheld by state (withholding on state disability payments)”
5. This is the screen where you previously entered Schedule H lines 2 and 4. This is where you now enter: 
6.  Only the CA SDI amount actually withheld from your employee’s paychecks or Zero, if you did not withhold SDI.

In this instance, the field "Social Security and Medicare tax withheld by state" in the California household employee section is only for California State Disability Insurance (SDI) or Paid Family Leave (PFL) that you withheld from your employee’s paycheck, not for Federal Social Security or Medicare taxes (which are reported on Schedule H lines 2 and 4), which aligns with the information I reported in my previous post.

@Mishonio 

[Mishonio]

NVM. Figured it out