How do I get TurboTax to acknowledge that I already paid taxes for my nanny?

[emilyjhogue]

I entered information for a 1040 - sched H for nanny taxes that was provided by a payroll service.. We have actually already paid all relevant taxes (SS, Medicare, Federal, State, Unemployment) via the service , but TurboTax keeps calculating as if we still owe that same amount again. How do I get TurboTax to ackhowledge what we already paid? Thank you.

[PatriciaV · Accepted solution]

If you've already paid your employer taxes by form 941 and 940, you are not required to complete Schedule H.

Include Schedule H with your personal tax return ONLY if you owe unpaid taxes on the wages you paid to Household Employees.

However, if you need to include the taxes you paid with Schedule H on your personal tax return, follow these instructions for reporting the tax you withheld on behalf of your household employees:

1. Click on the Federal Taxes Tab
2. Choose Deductions and Credits
3. Scroll down to Estimates and Other Taxes Paid
4. Select Estimates
5. Choose Federal Estimated Taxes, and enter the amounts that you paid quarterly for your household employee.

[revised]

[alaric9]

This seems like a Band-aid. Why doesn't TT take the values from schedule H and apply them correctly? Last year our refund was delayed for months because it was calculated incorrectly by TT which treats the values entered into schedule H as liabilities instead of credits. This seems like a simple fix rather than having users go back and enter estimated taxes in a different place.  (It is also more confusing to us non-professionals because the field just says Federal Estimated Payments. Is that just Federal taxes withheld or is it fed taxes, SS, and Medicare? -I'm guessing it's the latter, but that's just a guess)

[theadelucia]

Does this mean that I shouldn't complete the section about childcare at all and state that I did not pay for it?

[PatriciaV]

If you already paid the taxes withheld from your nanny's wages, then you are not required to include Schedule H on your return. So, yes, you can omit that section if these facts apply to you.

[Anonymous]

I use a service that prepares the Schedule H but you have to copy it over into TurboTax and include the quarterly payment as "estimated payments. If you don't include the schedule H information the IRS will return the withholding payments you made over the course of the year. I'm currently amending my return to correct this very situation.

[alaric9]

When I tried to enter our Schedule H information from the form we received from our payroll company, TurboTax reports an error in the final review and I can't submit it. Additionally, TT erroneously doesn't credit me with the taxes we've already paid through the payroll company and hits us with a lot of unpaid taxes. Last year this resulted in the IRS sending an additional refund  several months after our initial refund. When I tried to enter the data this year I found TurboTax was having the same problem as last year; the only way I was able to work around it was to not enter anything for Schedule H in TurboTax. This meant that I had to print my return just so I could submit the correct Schedule H and mail the return instead of filing it electronically (which all seems a bit silly).

[katy_lee_3]

Yes, turbo tax wouldn't let me include schedule H (already paid) and tried to retake out all the nanny taxes already paid. I ended up getting an erroneous return with all the nanny taxes sent back. So now having to amend and basically hope they take the money correctly. I won't be using TT again until they fix this issue.

[jab239]

Having this issue but the instructions are 3 years old, and can no longer find where to enter "estimated taxes paid"

[jramamoorthy]

AGREE - TURBO TAX PLEASE FIX (or clarify)
So now having to amend and basically hope they take the money correctly. I won't be using TT again until they fix this issue.

[jab239]

Update - we seem to have figured it out; use the search bar and search for "estimated taxes" - click "Go to estimated tax payments" and then the top button "Federal Estimated Taxes for 2018" even though you maybe don't have the "form 1040ES" - that's where you enter federal nanny taxes paid per quarter. For some reason we could only get the "Federal Estimated Taxes for 2018" if we used the search - if we tried to navigate to that page it was missing that section - so strange.  Good luck!

[genslermindy]

Do you also add the estimated state tax payments in the estimated tax payments to have turbo tax acknowledge the state taxes that were paid

[DianeW777]

Yes.  The state estimated tax payments must be included in the estimated tax section when completing your federal return for your state to recognize these payments.

1. Sign into your TurboTax account/return
2. Select Deductions and Credits > Scroll to Estimates and Other Taxes Paid > Select Estimated Tax Payments (may need to Show More)
3. Start or Revisit > Select State estimated taxes for 2020 > Start or Revisit
4. Continue to enter your state estimated tax payments.

[MeyersO]

How do we handle unemployment payments to the state? Are these treated as part of the cost of child care or as state tax payments?  What can we include in the fully weighted cost of child care?  Can we claim worker's compensation costs for our employee as part of the cost of child care?  What about the social security and medicare payments we make on behalf of our employees?  

It feels like this 'work around' complicates the issues and may result in a duplicate Form 1040 Schedule H being submitted to the IRS which is less than ideal. 

Thanks,
O 

[AmyC]

State unemployment goes on the sch H. They are not state tax payments. See:

•  2021 Schedule H (Form 1040) - Internal Revenue Service.
• 2021 Instructions for Schedule H - IRS 

As to the allowed expenses for childcare, Instructions for Form 2441 PDF states:

Household Services These are services needed to care for the qualifying person as well as to run the home while you worked or looked for work. They include, for example, the services of a cook, maid, babysitter, housekeeper, or cleaning person if the services were partly for the care of the qualifying person. However, they don't include the services of a chauffeur, bartender, or gardener. You can also include your share of the employment taxes paid on wages for qualifying child and dependent care services.

This means the amount you paid on the w2 plus the employment taxes, Social Security and Medicare.

You should file the sch H, the  2441 for childcare, and if you made estimated payments, enter them in the program. There should not be any workarounds needed now in  2022.

@MeyersO