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New Member
posted Jun 4, 2019 9:59:47 PM

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

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.

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1 Best answer
Expert Alumni
Jun 4, 2019 9:59:49 PM

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]


22 Replies
Expert Alumni
Jun 4, 2019 9:59:49 PM

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]


New Member
Jun 4, 2019 9:59:50 PM

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)

New Member
Jun 4, 2019 10:00:02 PM

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

Expert Alumni
Jun 4, 2019 10:00:31 PM

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.

Not applicable
Jun 4, 2019 10:00:32 PM

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.

New Member
Jun 4, 2019 10:00:34 PM

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).

New Member
Jun 4, 2019 10:00:35 PM

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.

New Member
Jun 4, 2019 10:00:36 PM

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

New Member
Jun 4, 2019 10:00:38 PM

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.

New Member
Jun 4, 2019 10:00:39 PM

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!

New Member
Feb 23, 2021 1:04:03 PM

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

Expert Alumni
Feb 28, 2021 7:41:32 AM

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.

New Member
Feb 21, 2022 9:48:30 AM

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,

Expert Alumni
Feb 21, 2022 12:50:53 PM

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

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 

Level 1
Jan 31, 2023 7:39:46 PM

how do i add that i have already paid the household employee taxes as shown on line 26 of schedule h that i received from my online payroll company?

Expert Alumni
Feb 1, 2023 5:49:13 AM

Have you paid a third party who then pays the household employee wages and employment taxes?  If so, you are not required to file Schedule H.

 

The Instructions for Schedule H page H-3 states:

 

If a government agency or third-party agent reports and pays the employment taxes on wages paid to your household employee on your behalf, you don't need to file Schedule H to report those taxes.

 

@gracel21

Returning Member
Feb 21, 2023 3:00:45 PM

We are in the same situation-- we received our Schedule H from our payroll company Nannychex, but the input on TurboTax was incorrect. I see the instructions above that, in line with IRS guidelines, "If a government agency or third-party agent reports and pays the employment taxes on wages paid to your household employee on your behalf, you don't need to file Schedule H to report those taxes."

 

However, the payroll company remitted our quarterly federal tax payments for the nanny. So, I entered those quarterly tax payments as our estimated payments we'd made. Do I now have to enter all the Schedule H information in the "Nanny and Household Employment Tex" section? If not, does the IRS already have the Schedule H information they need from the payroll company? I just want to know what I need to do to compete our return accurately. Thank you.

Expert Alumni
Feb 21, 2023 3:54:19 PM

You can delete your Schedule H from your return as long as your payroll company has filed all required federal returns associated with your domestic employee.  The purpose of Schedule H is to ensure the payroll taxes are paid and the income is reported to the IRS.  Since filing Forms 941, 940, and W-2 accomplishes this goal you are not required to also file a Schedule H.

 

The payroll company remitted the quarterly federal payments(Form 941). They should have also filed Form 940 (Unemployment Tax) and the W-2.  It is not necessary to file a Schedule H.

 

@everythingisfree 

Returning Member
Feb 22, 2023 10:47:34 AM

Thank you. I just received further instructions from Nannychex for TurboTax users. They say that we need to fill out the Schedule H in TurboTax so it is transmitted with our return, and that we also must enter the estimated tax payments that this payroll service made for us. Does this sound accurate from a tax-law perspective to you?

Expert Alumni
Feb 22, 2023 12:29:27 PM

Yes, if you pay federal and most likely state, unemployment taxes you should report this in the Schedule H Interview under "Wages and Withholding". While going through the interview you will answer Yes, to paying more than $2,400 in wages and withholding Federal Income Tax.  You will then navigate to "wages and withholding"  as illustrated in the screenshot below:

 

 

 

 

@everythingisfree 

New Member
Apr 1, 2023 11:49:40 AM

Hi - just curious where you entered the estimated tax payments?  I'm running into this Schedule H issue too since my payroll provider paid estimated quarterly amounts.  But TT is not factoring those in, so my tax bill is inflated by a significant amount.  Any insight into how you resolved would be very helpful!

Expert Alumni
Apr 1, 2023 3:46:41 PM

 

To enter the federal estimated payments:

 

  • Go to Federal on the left side of TurboTax Online
  • Click on Deductions and Credits at the top of the page
  • Scroll down to Estimates and Other Taxes Paid
  • Select Estimated Taxes Payments- click the Start button
  • Select Estimated taxes for 2022, click Start, and follow the prompts

Please see this TurboTax help article for information.

 

@RTDC14