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Nanny Taxes

I was very discouraged to have my nanny tax liability added onto my 2019 taxes, without TurboTax providing a direct path to then deduct these taxes I had already paid throughout 2019. My understanding is that if households are following code, they are all paying quarterly taxes throughout the year. I had to search online for a means to avoid paying these taxes once again at filing after the TurboTax questionnaire simply took it out of my refund. If I didn’t protect myself, I would have been out thousands of dollars.

This is particularly frustrating since I paid extra for TurboTax Premier, at the company’s urging. I would like to know how TurboTax will improve to ensure nanny tax filers can immediately enter their prepaid tax information to avoid doubling tax liability. This is far from unique scenario. I am still struggling to find what extra value I received in paying for Premier, when I had to protect myself rather than the other way around.

2 Replies
Level 15

Nanny Taxes

You don't pay the Schedule H tax during the year unless  the tax was submitted on a 941 form, then you can disregard the Schedule H.


See IRS Pub 926, page 11.


If you merely paid your own estimated tax quarterly then enter that in the "Taxes Paid" section for Estimated Tax.   That will put it on the 1040 line 18d to offset your tax.   That is independent from Schedule H.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Expert Alumni

Nanny Taxes

It depends on the rest of your situation why you you were prompted to upgrade to Premier. Filing Schedule H is included in TurboTax Deluxe.


Yes, you are correct. Reporting Nanny taxes are in two steps as described by @macuser_22:

  1. Report Nanny payments on Schedule H. 
    1. Click the articles for more details: Where is IRS Schedule H?
    2. Please note, if you are using a payroll service, they often will prepare the Schedule H for you.
  2. Report estimates paid for the employment taxes by following these steps:
    1. Type "estimates paid" in the search box and select the Jump to link from the results 

However, if the nanny employment taxes were filed already on Form 941 quarterly, then do not use Schedule H at all. 

See IRS Publication 926: Household Employer's Tax Guide (details regarding reporting if Form 941s were filed begins on the bottom of page 10).




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