Do I need to report a household employee (nanny) if I have a payroll company (SurePayroll) that handles all of my taxes for me and they have all been paid?

[PatriciaR]

Did you receive a Schedule H from the payroll company?

[robynindc]

They sent me nothing.  I can log on and access the following documents:  "employer W-2 wage and tax statements, W-3 transmittal of income and tax statements, and Schedule H."

[PatriciaR]

You will want to access the Schedule H from the payroll company and create the Schedule H in your tax return.  Please see the following steps:

 If you are e-filing your return, you will need to fill out Schedule H in TurboTax so that it is transmitted with your return.  If you are going to mail in your return, just include the paper copy of Schedule H prepared by the payroll company. 

Schedule H will calculate the Household Employment Taxes you owe, but you also need to enter the tax payments you paid under "estimated taxes."

To prepare a Schedule H in TurboTax, please follow these steps:

1.       Type "nanny tax" in the Search box (upper right of program) and click the 'Jump to' link

2.       Answer Yes to Did You Have a Nanny or Household Employee and follow the TurboTax interview

To Enter tax payments, follow these steps:

Federal withholding is reported in the process of preparing Schedule H.  To report any Federal/state/local tax payments you made, please follow these steps:

·         After you finish entering your information in the Nanny and Household Employee Tax section,

·         In the Search box (upper right of program) search "estimates paid" and select the "Jump to" link from results

·         On the next screen, click on the Start/Revisit box next to Federal/State [or Local] estimated taxes for 2017. 

·         Enter your payment(s) on the next screen, How much did you pay in Federal/State [or Local] estimated taxes?

NOTE:   If you filed a 940/941 and paid the tax, you do not file a schedule H at all.  See IRS Pub 926 page 11: https://www.irs.gov/pub/irs-pdf/p926.pdf  Business employment tax returns. Don't use Schedule H if you choose to pay the employment taxes for your household employee with business or farm employment  taxes. Instead, include the Social Security, Medicare, and withheld federal income taxes for the employee on the Form 941 or Form 944 you file for your business or on the Form 943 you file for your farm. Include the FUTA tax for the employee on your Form 940.

[Sum]

Is there a state version of Schedule-H where I can enter estimated State(MA) Taxes. For FED, adding schedule-H and the corresponding FED estimated taxes balances it out. But When I add estimated State Taxes (the amount that was payed by my payroll company to MA quarterly on my behalf), the State refund is increased. That doesn't seem right. Do I need to report anything about my nanny/household employment taxes to MA in my State-Returns ?

[wombat302]

I've used Turbotax for years, but they haven't done a great job on this issue.  Very frustrating.  However, I think I have the answer.  Yes, you have to file Schedule H even if you or your payroll company has already paid it.  This form shows what you owe, or would owe if it wasn't already paid.  Then for the taxes, ss, unemployment, etc. that you've already paid (or that your payroll company charged you for and sent in on your behalf), you have to fill out Schedule 3.

Under Forms, go to Schedule 3.  Under Part II, line 8, click on the amount in the right column to bring up the magnifying glass icon.  Click on the icon.  This will take you to a Tax Payments Worksheet, which is the source of the information for Schedule 3.  Your payroll company should/may have provided you with a Schedule H, but it only has the total amount.  You'll need to get copies of quarterly reports showing payments made on your behalf.  The 1040ES quarterly vouchers only have the total paid, but not enough info which is why you need the reports.

Using the info from the reports, you can now fill out the info on the Tax Payments Worksheet with the date, amount for Federal, and the date, amount, and 2-letter state code for the ID field.  The total amount shown on Line 8 (Federal portion) of the Tax Payments Worksheet should match the amount on Line 8a of Schedule H.  Line 8 (State portion) of the Tax Payments Worksheet should match the amount on Line 14 of Schedule H.  (I don't know if this is the same for all states, but it appears to be correct for Washington...).

So, in summary, Schedule H shows what you owe, and Schedule 3 shows what you already paid.  If you paid too much, the overage would be refunded.  If you didn't pay enough, the amount you owe is included in your overall tax liability.

Disclaimer:  I am not a tax expert - use this info at your own risk.  Still, I hope this helps  somebody.  It took me a while to figure this out.  Turbotax should be a little more helpful in the software on this issue.  

P.S.  I also use SurePayroll.  You can find the quarterly reports online under Reports, Quarterly & Annual Reports, 1040-ES, Wage Detail, select the year and click on update.  Then just click on View Report for each quarter.  I used the 1040ES to find the dates for each quarterly payment on the Tax Payments Worksheet.

[tgrant18]

This is so helpful. I wouldn't have been able to figure this out without your step-by-step guidance. Wish it was easier to input payments throughout the year.