IRS Form 942: Replaced by Schedule H for Household Employers

IRS Form 942 no longer exists. Household employers once used it to report Social Security and Medicare taxes every quarter, but Congress eliminated the quarterly filing requirement in 1994, and the IRS replaced Form 942 with Schedule H, a single annual form attached to your personal Form 1040.¹ If you employ a nanny, housekeeper, or caregiver and you’ve found a reference to Form 942, it points to a process that hasn’t existed in more than 30 years.

What Replaced Form 942 and Why

Form 942 required household employers to calculate and file employment taxes four times a year, on the same schedule businesses with full payroll departments follow. For a family employing one nanny, that was a lot of paperwork for not much tax. The Social Security Domestic Employment Reform Act of 1994 scrapped the quarterly requirement and moved household employment taxes to an annual filing tied to the employer’s own income tax return.² The same law raised the wage threshold, so families hiring occasional help for small amounts no longer had to file at all.

The replacement is Schedule H (Form 1040). Instead of a standalone quarterly return, you report all household employment taxes once a year on your personal return.

Filing Schedule H

Schedule H is where you calculate your total Social Security, Medicare, and federal unemployment taxes for the year. You attach it to your Form 1040. For the 2026 tax year, the filing deadline is April 15, 2027. An extension on your income tax return extends Schedule H along with it.³

Even if you aren’t otherwise required to file a tax return, you still have to file Schedule H if you owe household employment taxes. In that case, you can file Schedule H by itself.³

You also have to give your employee a Form W-2 showing wages and taxes withheld, and send copies to the Social Security Administration with Form W-3. The W-2 deadline for the 2026 tax year is February 1, 2027.³

You’ll need an Employer Identification Number before you can file either form. You can apply through the IRS using Form SS-4 and receive your EIN immediately.⁴

Do You Actually Owe Household Employment Taxes?

Two thresholds decide whether you owe anything at the federal level.

Social Security and Medicare

If you pay a household employee $3,000 or more in cash wages during 2026, you owe Social Security and Medicare taxes on all cash wages paid to that worker for the year.⁵ The Social Security rate is 6.2% each for you and the employee, applied to wages up to the $184,500 wage base. The Medicare rate is 1.45% each with no cap.⁶ That’s 7.65% withheld from the employee’s pay and a matching 7.65% from yours, for a combined FICA cost of 15.3%.

If your employee earns more than $200,000 in a calendar year, you also withhold an additional 0.9% Medicare tax on wages above that amount. You don’t match the additional Medicare tax.³

Federal Unemployment (FUTA)

A different threshold triggers FUTA. If you pay $1,000 or more in total cash wages to all household employees in any calendar quarter of 2025 or 2026, you owe FUTA tax on the first $7,000 paid to each employee during 2026.⁷ The statutory FUTA rate is 6.0%, but a credit for state unemployment taxes you pay typically reduces the effective federal rate to 0.6%.⁸ FUTA is entirely the employer’s expense. You never deduct it from the employee’s wages.

Federal Income Tax Withholding

Withholding federal income tax from a household employee’s pay is optional. You aren’t required to do it. If the employee asks and you agree, get a completed Form W-4 from them first.⁹

Is the Worker Actually Your Employee?

None of this applies unless the worker is a household employee rather than an independent contractor. The IRS test looks at control: if you control not only what work gets done but how the worker does it, that person is your employee.¹⁰

Paying Through the Year

Schedule H is filed once a year, but the IRS still expects you to pay enough tax during the year to cover the liability. If you don’t, you can face an estimated tax underpayment penalty.⁹ This is where the shift from Form 942 quietly bites: there’s no quarterly form to prompt you.

Two ways to stay ahead of it:

If you work for someone else, give your own employer a new Form W-4 asking for additional withholding from each paycheck. The extra covers the household employment taxes you’ll owe in April.
Send quarterly estimated tax payments on Form 1040-ES. For 2026, payments are due April 15, June 15, and September 15, 2026, plus January 15, 2027.

You can split the two approaches. What matters is that the total you’ve paid in before filing covers both your income tax and your household employment tax.³

Penalties for Skipping Schedule H

Not filing Schedule H when you owe household employment taxes is effectively a late or missing return. The IRS charges a failure-to-file penalty of 5% of the unpaid tax for each month the return is late, up to 25%. If the return is more than 60 days late, the minimum penalty is $525 or 100% of the unpaid tax, whichever is less.¹² Interest runs on the unpaid balance as well, and the misclassification penalties above can stack on top. The IRS can waive penalties for reasonable cause, but not knowing about Schedule H is a hard argument when the rules are published in a free IRS guide every year.

State Taxes Are Separate

Federal taxes are only part of the picture. Most states require household employers to pay state unemployment insurance, and many require workers’ compensation coverage once an employee crosses a state-set hours or wage threshold. Requirements vary widely, and the IRS recommends contacting your state unemployment tax agency directly to see what applies.³

1
Internal Revenue Service. About Schedule H (Form 1040), Household Employment Taxes
2
Social Security Administration. Social Security Domestic Employment Reform Act of 1994
3
Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
4
Internal Revenue Service. About Form SS-4, Application for Employer Identification Number (EIN)
5
Social Security Administration. Employment Coverage Thresholds
6
Social Security Administration. Contribution and Benefit Base
7
Office of the Law Revision Counsel. United States Code Title 26 – 3306 Definitions
8
Office of the Law Revision Counsel. United States Code Title 26 – 3301 Rate of Tax
9
Internal Revenue Service. Topic No. 756, Employment Taxes for Household Employees
10
Internal Revenue Service. United States Code Title 26 – 3509 Determination of Employer’s Liability for Certain Employment Taxes
12
Internal Revenue Service. Failure to File Penalty