How does my mother report the wages I paid her as a household employee ?

[ash_winks]

I hired my mother as a household employee, and paid her $X in all of 2024, via Zelle payments every month.  She also has some interest income from her foreign accounts.  She is not taking care of any children.  As I understand it, since she is my parent, I don't have to deduct SS or Medicare from the wages I paid her monthly, and nor do I have to issue her a W2.  But now, how does she report the wages ?  She tried reporting it as "self employment", but that shoots up the tax owed, and based on the discussions I have seen here, I understand that she has to report it as "wages not reported on w2".  But where in TurboTax does she report these wages ?  Any advice would be greatly appreciated !

[DaveF1006 · Accepted solution]

 Yes, here is how she should  report the income.

1. Go to federal or federal taxes
2. Go to income or Wages and income depending on her version of Turbo Tax
3. Go to less Common Income
4. Go to miscellaneous income
5. Go to other Income not Reported on a W2 or 1099

For future reference, please read the Turbo Tax link provided below for further information regarding Schedule H requirements, although it does mention in the IRS link, you do not need to withhold FICA taxes if your employee is a parent.

What Is Schedule H: Household Employment Taxes

[Edited 3/03/24|10:18 am PST]

[Opus 17]

Household employee wages not on a W-2 have their own specific place on form 1040, which is line 1b.  Hopefully, if you follow the links for "other wages not on a W-2", one of the options will be household employee. (I have not tested it.)

You are correct that you do not pay household employee tax, she does not pay SS or self-employment tax, and she does not get social security work credits. 

[ash_winks]

Thank you for your response, its much appreciated !! In this link: https://www.irs.gov/instructions/i1040sh, under the section "How To Fill in Schedule H, Form W-2, and Form W-3", it says to EXCLUDE wages paid to a parent as long as they are NOT taking care of a child.  The text is as below.

Doesnt the below mean that I dont have to file a Schedule H or W2 for her ?  Please advise.  MUCH appreciated.

"To figure the total cash wages you paid in 2024 to each household employee, don't include amounts paid to any of the following individuals.

• Your spouse.

• Your child who was under age 21.

• Your parent. (See Exception for parents below.)

• Your employee who was under age 18 at any time during 2024. If the employee wasn't a student, see Exception for employees under age 18 below.

Exception for parents.

 

Include the cash wages you paid your parent for work in or around your home if both (1) and (2) below apply.

1. Your child (including an adopted child or stepchild) who lived with you was under age 18 or had a physical or mental condition that required the personal care of an adult for at least 4 continuous weeks during the calendar quarter in which services were performed. A calendar quarter is January through March, April through June, July through September, or October through December.

2. You were divorced and not remarried, a widow or widower, or married to and living with a person whose physical or mental condition prevented your spouse from caring for the child for at least 4 continuous weeks during the calendar quarter in which services were performed.

"

[Opus 17]

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@ash_winks wrote:

Doesnt the below mean that I dont have to file a Schedule H or W2 for her ?  Please advise.  MUCH appreciated.

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Right, you are exactly where you were when you posted the question.   You don't file schedule H, you don't issue a W-2, and your mother reports her income on line 1b as "household employee wages not on a W-2."

[rjs]

On your mother's tax return, the instructions that DaveF1006 gave you will take her to a screen that asks "Did you receive any other wages?" When she selects Yes, the next screen is specifically for entering household employee wages. Ignore the note on that screen that says to only report income less than $2,700. It does not apply to your mother's situation. Enter the full amount that you paid her, even if it's more than $2,700. The income will be reported on Form 1040 line 1b, which is where it belongs.