Department of the Treasury

Internal Revenue Service

Publication 926

Cat. No. 64286A

Household

Employer's

Tax Guide

For use in 2021


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Contents

What's New. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Do You Have a Household Employee? . . . . . . . . . . 3

Can Your Employee Legally Work in the United

States? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Do You Need To Pay Employment Taxes? . . . . . . . 4 Social Security and Medicare Taxes . . . . . . . . . . 6 Federal Unemployment (FUTA) Tax . . . . . . . . . . . 9

Do You Need To Withhold Federal Income

Tax? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

What Do You Need To Know About the Earned

Income Credit? . . . . . . . . . . . . . . . . . . . . . . . . 10

How Do You Make Tax Payments? . . . . . . . . . . . . 10

What Forms Must You File? . . . . . . . . . . . . . . . . . 11

What Records Must You Keep? . . . . . . . . . . . . . . 12

Can You Claim a Credit for Child and

Dependent Care Expenses? . . . . . . . . . . . . . . 12

How Can You Correct Schedule H? . . . . . . . . . . . 12

How To Get Tax Help . . . . . . . . . . . . . . . . . . . . . . 14

Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Future Developments

For the latest information about developments related to Pub. 926, such as legislation enacted after it was published, go to IRS.gov/Pub926.

What's New

Coronavirus (COVID-19) related employment tax credits and other tax relief.

The Families First Coronavirus Response Act (FFCRA), enacted on March 18, 2020, and amended by the COVID-related Tax Relief Act of 2020, provides certain employers refundable tax credits that reim-burse them for the cost of providing paid sick and fam-ily leave wages to their employees for leave related to COVID-19. Qualified sick and family leave wages and the related credits for qualified sick and family leave wages are only reported on employment tax returns with respect to wages paid for leave taken in quarters beginning after March 31, 2020, and before April 1, 2021, unless extended by future legislation. If you paid qualified sick and family leave wages in 2021 for 2020 leave, you will claim the credit on your 2021 em-ployment tax return. Under the FFCRA, certain

Mar 05, 2021

employers with fewer than 500 employees provide paid sick and family leave to employees unable to work or telework. The FFCRA required such employ-ers to provide leave to such employees after March 31, 2020, and before January 1, 2021. The COVID-re-lated Tax Relief Act of 2020 extends the periods for which employers providing such leave that otherwise meets the requirements of the FFCRA may continue to claim tax credits to wages paid for leave taken be-fore April 1, 2021, although the requirement that em-ployers provide the leave still expired on December 31, 2020. For more information about the credit for qualified sick and family leave wages, and to see if fu-ture legislation extends the dates that the credit may be claimed, go to IRS.gov/PLC. Also check the Re-cent Developments section on IRS.gov/ScheduleH or IRS.gov/AnexoHPR.

Deferral of the employer share of social security tax expired. The Coronavirus Aid, Relief, and Eco-nomic Security Act (CARES Act), enacted on March 27, 2020, and amended by the Taxpayer Certainty and Disaster Tax Relief Act of 2020, allowed employ-ers to defer the deposit and payment of the employer share of social security tax. The deferred amount of the employer share of social security tax was only available for deposits due on or after March 27, 2020, and before January 1, 2021, as well as deposits and payments due after January 1, 2021, that are required for wages paid on or after March 27, 2020, and before January 1, 2021, unless extended by future legisla-tion. Therefore, the line previously used for the em-ployer deferral will be “Reserved for future use.” One-half of the employer share of social security tax is due by December 31, 2021, and the remainder is due by December 31, 2022. Any payments or deposits you make before December 31, 2021, are first applied against your payment due on December 31, 2021, and then applied against your payment due on De-cember 31, 2022. Because both December 31, 2021, and December 31, 2022, are nonbusiness days, pay-ments made on the next business day will be consid-ered timely.For more information about the deferral of employment tax deposits, and to see if future legisla-tion extends the deferral, go to IRS.gov/ETD for up-dates and IRS.gov/ScheduleH or IRS.gov/AnexoHPR. Also check the Recent Developments section at IRS.gov/Pub926.

Disaster tax relief. Disaster tax relief is available for those impacted by disasters. For more information about disaster relief, go to IRS.gov/DisasterTaxRelief.

Social security and Medicare tax for 2021. The social security tax rate is 6.2% each for the employee and em-ployer, unchanged from 2020. The social security wage base limit is $142,800.

The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2020. There is no wage base limit for Medicare tax.

Social security and Medicare taxes apply to the wages of household employees you pay $2,300 or more in cash in 2021. For more information, see Cash wages, later.

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Qualified parking exclusion and commuter transpor-tation benefit. For 2021, the monthly exclusion for quali-fied parking is $270 and the monthly exclusion for com-muter highway vehicle transportation and transit passes is $270.

Reminders

2021 withholding tables. The federal income tax with-holding tables are included in Pub. 15-T, Federal Income Tax Withholding Methods. You may also use the Income Tax Withholding Assistant for Employers at IRS.gov/ITWA to help you figure federal income tax withholding.

2021 federal income tax withholding. The household employer rules for federal income tax withholding have not changed. That is, you're not required to withhold fed-eral income tax from wages you pay a household em-ployee. You should withhold federal income tax only if your household employee asks you to withhold it and you agree. Employers will figure withholding based on the in-formation from the employee's most recently submitted Form W-4, Employee’s Withholding Certificate. Similarly, any employees hired prior to 2020 who wish to adjust their withholding must use the redesigned form. For the latest information about developments related to Form W-4, go to IRS.gov/FormW4.

Filing due date for 2021 Forms W-2 and W-3. Both pa-per and electronically filed 2021 Forms W-2, Wage and Tax Statement, and W-3, Transmittal of Wage and Tax Statements, must be filed with the Social Security Admin-istration (SSA) by January 31, 2022.

Qualified bicycle commuting reimbursement suspen-ded. Section 11047 of Public Law 115-97 suspends the exclusion of qualified bicycle commuting reimbursements from your employee's income for any tax year beginning after 2017 and before 2026.

Certification program for professional employer or-ganizations (PEOs). The Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014, required the IRS to es-tablish a voluntary certification program for PEOs. PEOs handle various payroll administration and tax reporting re-sponsibilities for their business clients and are typically paid a fee based on payroll costs. To become and remain certified under the certification program, certified profes-sional employer organizations (CPEOs) must meet vari-ous requirements described in sections 3511 and 7705 and related published guidance. Certification as a CPEO may affect the employment tax liabilities of both the CPEO and its customers. A CPEO is generally treated for em-ployment tax purposes as the employer of any individual who performs services for a customer of the CPEO and is covered by a contract described in section 7705(e)(2) be-tween the CPEO and the customer (CPEO contract), but only for wages and other compensation paid to the indi-vidual by the CPEO. To become a CPEO, the organization must apply through the IRS Online Registration System. For more information or to apply to become a CPEO, go to IRS.gov/CPEO. Also, see Revenue Procedure 2017-14, 2017-3 I.R.B. 426, available at IRS.gov/irb/ 2017-03_IRB#RP-2017-14.

Publication 926 (2021)

Outsourcing payroll duties. Generally, as an employer, you're responsible to ensure that tax returns are filed and deposits and payments are made, even if you contract with a third party to perform these acts. You remain re-sponsible if the third party fails to perform any required ac-tion. Before you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer, such as a payroll service pro-vider or reporting agent, go to IRS.gov/ OutsourcingPayrollDuties for helpful information on this topic. If a CPEO pays wages and other compensation to an individual performing services for you, and the services are covered by a contract described in section 7705(e)(2) between you and the CPEO (CPEO contract), then the CPEO is generally treated as the employer, but only for wages and other compensation paid to the individual by the CPEO. However, with respect to certain employees covered by a CPEO contract, you may also be treated as an employer of the employees and, consequently, may also be liable for federal employment taxes imposed on wages and other compensation paid by the CPEO to such employees. For more information on the different types of third-party payer arrangements, see section 16 in Pub. 15. Credit reduction states. A state that hasn't repaid money it borrowed from the federal government to pay un-employment benefits is a “credit reduction state.” The De-partment of Labor (DOL) determines these states. If you paid any wages that are subject to the unemployment compensation laws in any credit reduction state, your fed-eral unemployment (FUTA) tax credit is reduced. See the Instructions for Schedule H (Form 1040) for more informa-tion.

Medicaid waiver payments. Notice 2014 -7 provides that certain Medicaid waiver payments are excludable from income for federal income tax purposes. See Notice 2014 -7, 2014-4 I.R.B. 445, available at IRS.gov/irb/ 2014-04_IRB#NOT-2014-7 . For more information, includ-ing questions and answers related to Notice 2014-7, go to IRS.gov/MedicaidWaiverPayments.

Photographs of missing children. The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC) . Photographs of missing children se-lected by the Center may appear in this publication on pa-ges that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recog-nize a child.

Introduction

The information in this publication applies to you only if you have a household employee. If you have a household employee in 2021, you may need to pay state and federal employment taxes for 2021. You must generally add your federal employment taxes to the income tax that you will report on your 2021 federal income tax return.

This publication will help you decide whether you have a household employee and, if you do, whether you need

Publication 926 (2021)

to pay federal employment taxes (social security tax, Medicare tax, FUTA, and federal income tax withholding). It explains how to figure, pay, and report these taxes for your household employee. It also explains what records you need to keep.

This publication also tells you where to find out whether you need to pay state unemployment tax for your house-hold employee.

Comments and suggestions. We welcome your com-ments about this publication and your suggestions for fu-ture editions.

You can send us comments through IRS.gov/ FormComments.

Or you can write to:

Internal Revenue Service

Tax Forms and Publications

1111 Constitution Ave. NW, IR-6526

Washington, DC 20224

Although we can't respond individually to each com-ment received, we do appreciate your feedback and will consider your comments and suggestions as we revise our tax forms, instructions, and publications. Do not send tax questions, tax returns, or payments to the above ad-dress.

Getting answers to your tax questions. If you have a tax question not answered by this publication or the How To Get Tax Help section at the end of this pulication, go to the IRS Interactive Tax Assistant page at IRS.gov/ITA where you can find topics by using the search feature or viewing the categories listed.

Getting tax forms, instructions, and publications. Visit IRS.gov/Forms to download current and prior-year forms, instructions, and publications.

Ordering tax forms, instructions, and publications. Go to IRS.gov/OrderForms to order current forms, instruc-tions and publications; call 800-829-3676 to order prior-year forms and instructions. The IRS will process your order for forms and publications as soon as possible. Do not resubmit requests you’ve already sent us. You can get forms and publications faster online.

Do You Have a Household Employee?

You have a household employee if you hired someone to do household work and that worker is your employee. The worker is your employee if you can control not only what work is done, but how it is done. If the worker is your em-ployee, it doesn't matter whether the work is full time or part time or that you hired the worker through an agency or from a list provided by an agency or association. It also doesn't matter whether you pay the worker on an hourly, daily, or weekly basis, or by the job.

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Example. You pay Betty Shore to babysit your child and do light housework 4 days a week in your home. Betty follows your specific instructions about household and childcare duties. You provide the household equipment and supplies that Betty needs to do her work. Betty is your household employee.

Household work. Household work is work done in or around your home. Some examples of workers who do household work are:

Babysitters,

Butlers,

Caretakers,

Cooks,

Domestic workers,

Drivers,

Health aides,

Housecleaning workers,

Housekeepers,

Maids,

Nannies,

Private nurses, and

Yard workers.

Household work doesn't include services performed by these workers unless the services are performed in or around your private home. A separate and distinct dwell-ing unit maintained by you in an apartment house, hotel, or other similar establishment is considered a private home. Services not of a household nature, such as serv-ices performed as a private secretary, tutor, or librarian, even though performed in your home, aren't considered household work.

Workers who aren't your employees. If only the worker can control how the work is done, the worker isn't your employee but is self-employed. A self-employed worker usually provides his or her own tools and offers services to the general public in an independent business.

A worker who performs childcare services for you in his or her home generally isn't your employee.

If an agency provides the worker and controls what work is done and how it is done, the worker isn't your em-ployee.

Example. You made an agreement with John Peters to care for your lawn. John runs a lawn care business and offers his services to the general public. He provides his own tools and supplies, and he hires and pays any help-ers he needs. Neither John nor his helpers are your household employees.

More information. More information about who is an employee is in sections 1 and 2 of Pub. 15-A.

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Can Your Employee Legally Work in the United States?

It is unlawful for you to knowingly hire or continue ! to employ an alien who can’t legally work in the

CAUTIONUnited States.

When you hire a household employee to work for you on a regular basis, you and the employee must complete the U.S. Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. No later than the first day of work, the employee must complete the em-ployee section of the form by providing certain required in-formation and attesting to his or her current work eligibility status in the United States. You must complete the em-ployer section by examining documents presented by the employee as evidence of his or her identity and employ-ment eligibility. Acceptable documents to establish iden-tity and employment eligibility are listed on Form I-9. You should keep the completed Form I-9 in your own records. Don't submit it to the IRS, the USCIS, or any other govern-ment or other entity. The form must be kept available for review upon notice by an authorized U.S. Government of-ficial.

For more information on completing Form I-9, see M-274, Handbook for Employers, published by the US-CIS.

You can get Form I-9 and the USCIS Handbook for Employers by visiting the USCIS website at

USCIS.gov/I-9-Central.

If you have questions about the employment eligi-bility verification process or other immigration -re-lated employment matters, contact the USCIS Of-

fice of Business Liaison at 800-357-2099.

You may use the Social Security Number Verification Service (SSNVS) at SSA.gov/employer/ssnv.htm to verify that an employee name matches an SSN. A person may have a valid SSN but not be authorized to work in the Uni-ted States. You may use E -Verify at e-verify.gov to con-firm the employment eligibility of newly hired employees.

Do You Need To Pay

Employment Taxes?

If you have a household employee, you may need to with-hold and pay social security and Medicare taxes, pay fed-eral unemployment tax, or both. To find out, read Table 1.

You don't need to withhold federal income tax from your household employee's wages. But if your employee asks you to withhold it, you can. See Do You Need To Withhold Federal Income Tax, later.

If you need to pay social security, Medicare, or federal unemployment tax or choose to withhold federal income

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Table 1. Do You Need To Pay Employment Taxes?

IF you ...			THEN you need to ...
A	Pay cash wages of $2,300 or more in 2021 to any one		Withhold and pay social security and Medicare taxes.
	household employee.		•	The taxes are 15.3%1 of cash wages.
	Don't count wages you pay to:		•	Your employee's share is 7.65%.1 (You can choose to pay it
	•	Your spouse,	•	yourself and not withhold it.)
	•	Your child under the age of 21,		Your share is 7.65%.
	•	Your parent (see Wages not counted, later, for an
	•	exception), or
		Any employee under the age of 18 at any time in 2021 (see
		Wages not counted, later, for an exception).

B	Pay total cash wages of $1,000 or more in any calendar quarter		Pay federal unemployment tax.
	of 2020 or 2021 to household employees.		•	The tax is 6% of cash wages.
	Don't count wages you pay to:		•	Wages over $7,000 a year per employee aren't taxed.
	•	Your spouse,	•	You may also owe state unemployment tax.
	•	Your child under the age of 21, or
	•	Your parent.

1 In addition to withholding Medicare tax at 1.45%, you must withhold a 0.9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. You’re required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Additional Medicare Tax is only imposed on the employee. There is no employer share of Additional Medicare Tax. All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold.

Note. If neither A nor B above applies, you don't need to pay any federal employment taxes. But you may still need to pay state employment taxes.

Table 2. Household Employer's Checklist

You may need to do the following things when you have a household employee.

When you hire a household employee:	Find out if the person can legally work in the United States.
	Find out if you need to withhold and pay federal taxes.
	Find out if you need to withhold and pay state taxes.
When you pay your household	Withhold social security and Medicare taxes.
employee:	Withhold federal income tax.
	Decide how you will make tax payments.
	Keep records.
By January 31, 2022:	Get an employer identification number (EIN).
	Give your employee Copies B, C, and 2 of Form W-2, Wage and Tax Statement.
	Send Copy A of Form W-2 with Form W-3 to the SSA. Don't send Form W-2 to the SSA
	if you didn't withhold federal income tax and the social security and Medicare wages were
	below $2,300 for 2021.
By April 15, 2022:	File Schedule H (Form 1040), Household Employment Taxes, with your 2021 federal
	income tax return (Form 1040, 1040-SR, 1040-NR, 1040-SS, or 1041).
	If you don't have to file a return, file Schedule H by itself.

tax, read Table 2 for an overview of what you may need to do.

If you don't need to pay social security, Medicare, TIP or federal unemployment tax and don't choose to withhold federal income tax, read State employ-ment taxes next. The rest of this publication doesn't apply

to you.

State employment taxes. You should contact your state unemployment tax agency to find out whether you need to pay state unemployment tax for your household em-ployee. For a list of state unemployment tax agencies, visit the U.S. Department of Labor's website at oui.doleta.gov/unemploy/agencies.asp. You should also

determine if you need to pay or collect other state employ-ment taxes or carry workers' compensation insurance.

Consequences of not paying employment taxes. If you have a household employee and you're required to withhold and pay employment taxes and you don't, you will generally be liable for the employment taxes that you should've withheld and paid. See section 2 in Pub. 15 for additional information. Interest and penalties may also be charged. You may have to pay a penalty if you don't give Forms W-2 to your employees or file Copy A of the forms with the SSA by the due dates. You may also have to pay a penalty if you don't show your employee's social security number (SSN) on Form W-2 or don't provide correct infor-mation on the form.

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Social Security and Medicare Taxes

The social security tax pays for old-age, survivors, and disability benefits for workers and their families. The Medi-care tax pays for hospital insurance.

Both you and your household employee may owe so-cial security and Medicare taxes. Your share is 7.65% (6.2% for social security tax and 1.45% for Medicare tax) of the employee's social security and Medicare wages. Your employee's share is also 7.65% (6.2% for social se-curity tax and 1.45% for Medicare tax). In addition to with-holding Medicare tax at 1.45%, you must withhold a 0.9% Additional Medicare Tax from wages you pay to an em-ployee in excess of $200,000 in a calendar year. You’re required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Additional Medicare Tax is only imposed on the employee. There is no employer share of Additional Medicare Tax. All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. For more information on Additional Medicare Tax, go to IRS.gov/ADMT.

Generally, you can use Table 3 to figure the TIP amount of social security and Medicare taxes to

withhold from each wage payment.

You’re responsible for payment of your employee's share of the taxes as well as your own. You can either withhold your employee's share from the employee's wa-ges or pay it from your own funds. If you decide to pay the employee's share from your own funds, see Not withhold-ing the employee's share, later. Pay the taxes as dis-cussed under How Do You Make Tax Payments, later. Also see What Forms Must You File , later.

Social security and Medicare wages. You figure social security and Medicare taxes on the social security and Medicare wages you pay your employee.

If you pay your household employee cash wages of $2,300 or more in 2021, all cash wages you pay to that employee in 2021 (regardless of when the wages were earned) up to $142,800 are social security wages and all cash wages are Medicare wages. However, any noncash wages you pay don't count as social security and Medi-care wages.

If you pay the employee less than $2,300 in cash wa-ges in 2021, none of the wages you pay the employee are social security or Medicare wages and neither you nor your employee will owe social security or Medicare tax on those wages.

Cash wages. Cash wages include wages you pay by check, money order, etc. Cash wages don't include the value of food, lodging, clothing, transit passes, and other noncash items you give your household employee. How-ever, cash you give your employee in place of these items is included in cash wages.

Noncash wages paid to household employees aren't subject to social security taxes or Medicare taxes;

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however, they are subject to federal income tax unless a specific exclusion applies. Report the value of taxable noncash wages in box 1 of Form W-2 together with cash wages. Don't show noncash wages in box 3 or in box 5 of Form W-2. See Do You Need To Withhold Federal In-come Tax , later. Also see section 5 of Pub. 15 for more in-formation on cash and noncash wages, and Pub. 15-B for more information on fringe benefits.

State disability payments treated as wages. Cer-tain state disability plan payments that your household employee may receive are treated as social security and Medicare wages. For more information about these pay-ments, see the Instructions for Schedule H (Form 1040) and the notice issued by the state.

Wages not counted. Don't count wages you pay to any of the following individuals as social security or Medi-care wages, even if these wages are $2,300 or more dur-ing the year.

1. Your spouse.

2. Your child who is under the age of 21.

3. Your parent. Exception: Count these wages if both the following conditions apply.

a. Your parent cares for your child (including an adopted child or stepchild) who is either of the fol-lowing.

i. Under the age of 18.

ii. Has a physical or mental condition that re-quires the personal care of an adult for at least 4 continuous weeks in the calendar quarter services were performed.

b. Your marital status is one of the following.

iii. You’re divorced and haven't remarried.

iv. You’re a widow or widower.

v. You’re living with a spouse whose physical or mental condition prevents him or her from car-ing for your child for at least 4 continuous weeks in the calendar quarter services were performed.

4. An employee who is under the age of 18 at any time during the year. Exception: Count these wages if providing household services is the employee's prin-cipal occupation. If the employee is a student, provid-ing household services isn't considered to be his or her principal occupation.

Also, if your employee's cash wages reach $142,800 (maximum wages subject to social security tax) in 2021, don't count any wages you pay that employee during the rest of the year as social security wages to figure social security tax. Continue to count the employee's cash wa-ges as Medicare wages to figure Medicare tax.

If you reimburse your employee for qualified parking, transportation in a commuter highway vehicle, or transit passes, you may be able to exclude the cash reimbursement amounts from counting as cash wages

Publication 926 (2021)

subject to social security and Medicare taxes. Qualified parking is parking at or near your home or at or near a lo-cation from which your employee commutes to your home. It doesn't include parking at or near your employ-ee's home. For 2021, you can reimburse your employee up to $270 per month for qualified parking and $270 per month for combined commuter highway vehicle transpor-tation and transit passes. See Transportation (Commut-ing) Benefits in Pub. 15-B for more information. Any cash reimbursement over these amounts is included as wages.

Withholding the employee's share. You should with-hold the employee's share of social security and Medicare taxes if you expect to pay your household employee cash wages of $2,300 or more in 2021. However, if you prefer to pay the employee's share yourself, see Not withholding the employee's share, later.

You can withhold the employee's share of the taxes even if you’re not sure your employee's cash wages will be $2,300 or more in 2021. If you withhold the taxes but then actually pay the employee less than $2,300 in cash wages for the year, you should repay the employee. Don't report withheld taxes that you repaid to the employee on Form W-2.

Withhold 7.65% (6.2% for social security tax and 1.45% for Medicare tax) from each payment of social security and Medicare wages. Generally, you can use Table 3 to figure the proper amount to withhold. You will pay the amount withheld to the IRS with your share of the taxes. Don't withhold any social security tax after your employ-ee's social security wages for the year reach $142,800.

If you make an error by withholding too little, you should withhold additional taxes from a later payment. If you with-hold too much, you should repay the employee.

In addition to withholding Medicare tax at 1.45%, ! you must withhold a 0.9% Additional Medicare CAUTION Tax from wages you pay to an employee in ex-cess of $200,000 in a calendar year. You’re required to begin withholding Additional Medicare Tax in the pay pe-riod in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Additional Medicare Tax is only imposed on the employee. There is no employer share of Additional Medicare Tax. All wages that are sub-ject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 with-holding threshold. For more information on Additional

Medicare Tax, go to IRS.gov/ADMT.

Example. On February 8, 2021, Mary Brown hired Jane A. Oak (who is an unrelated individual over age 18) to care for her child and agreed to pay cash wages of $50 every Friday. Jane worked for the remainder of the year (a total of 46 weeks). Jane didn't give Mary a Form W-4 to request federal income tax withholding. The following is the information Mary will need to complete Schedule H, Form W-2, and Form W -3. See the completed Sample Form W-2 and Form W-3 for 2021 at the end of this publi-cation.

Total cash wages paid to Jane . . . . .	$2,300.00
	($50 x 46 weeks)
Jane's share of:
Social security tax . . . . . . . .	$142.60
	($2,300 x 6.2% (0.062))
Medicare tax . . . . . . . . . . .	$33.35
	($2,300 x 1.45% (0.0145))
Mary's share of:
Social security tax . . . . . . . .	$142.60
	($2,300 x 6.2% (0.062))
Medicare tax . . . . . . . . . . .	$33.35
	($2,300 x 1.45% (0.0145))

Amount reported on Form W-2 and Form W-3:
Box 1:	Wages, tips . . . . . . . . . . . . . . . . . . .	$2,300.00
Box 3: Social security wages . . . . . . . . . . . . .		$2,300.00
Box 4: Social security tax withheld . . . . . . . . .		$142.60
Box 5: Medicare wages and tips . . . . . . . . . . .		$2,300.00
Box 6:	Medicare tax withheld . . . . . . . . . . . . .	$33.35

For information on withholding and reporting federal in-come taxes, see Pub. 15 and Pub.15-T.

Not withholding the employee's share. If you prefer to pay your employee's social security and Medicare taxes from your own funds, don't withhold them from your em-ployee's wages. The social security and Medicare taxes you pay to cover your employee's share must be included in the employee's wages for income tax purposes. How-ever, they aren't counted as social security and Medicare wages or as federal unemployment (FUTA) wages. Re-port the social security and Medicare taxes that you paid in boxes 4 and 6 of your employee’s Form W-2; also add the taxes to your employee’s wages reported in box 1 of Form W-2.

Example. In 2021, you hire a household employee (who is an unrelated individual over age 18) to care for your child and agree to pay cash wages of $100 every Fri-day. You expect to pay your employee $2,300 or more for the year. You decide to pay your employee's share of so-cial security and Medicare taxes from your own funds. You pay your employee $100 every Friday without with-holding any social security or Medicare taxes.

For social security and Medicare tax purposes, your employee's wages each payday are $100. For each wage payment, you will pay $15.30 when you pay the taxes. This is $7.65 ($6.20 for social security tax plus $1.45 for Medicare tax) to cover your employee's share plus $7.65 ($6.20 for social security tax plus $1.45 for Medicare tax) for your share. For income tax purposes, your employee's wages each payday are $107.65 ($100 + the $7.65 you will pay to cover your employee's share of social security and Medicare taxes).

For a more detailed example that includes a completed Schedule H, Form W-2, and Form W-3, see the Instruc-tions for Schedule H (Form 1040).

Publication 926 (2021)Page 7

Table 3. Employee Social Security (6.2%) and Medicare (1.45%1) Tax Withholding Table

(See Pub. 15-T for federal income tax withholding tables.)

Use this table to figure the amount of social security and Medicare taxes to withhold from each wage payment. For example, on a wage payment of $180, the employee social security tax is $11.16 ($6.20 tax on $100 plus $4.96 on $80 wages). The employee Medicare tax is $2.61 ($1.45 tax on $100 plus $1.16 on $80 wages).

If wage	The social		The Medicare		If wage	The social	The Medicare
	security tax to		tax to be			security tax to	tax to be
payment is:	be withheld is:		withheld is:		payment is:	be withheld is:	withheld is:
$1.00.......		$ .06		$ .01	$51.00........	$ 3.16	$ .74
2.00.......		.12		.03	52.00........	3.22	.75
3.00.......		.19		.04	53.00........	3.29	.77
4.00.......		.25		.06	54.00........	3.35	.78
5.00.......		.31		.07	55.00........	3.41	.80
6.00.......		.37		.09	56.00........	3.47	.81
7.00.......		.43		.10	57.00........	3.53	.83
8.00.......		.50		.12	58.00........	3.60	.84
9.00.......		.56		.13	59.00........	3.66	.86
10.00.......		.62		.15	60.00........	3.72	.87
11.00.......		.68		.16	61.00........	3.78	.88
12.00.......		.74		.17	62.00........	3.84	.90
13.00.......		.81		.19	63.00........	3.91	.91
14.00.......		.87		.20	64.00........	3.97	.93
15.00.......		.93		.22	65.00........	4.03	.94
16.00.......		.99		.23	66.00........	4.09	.96
17.00.......		1.05		.25	67.00........	4.15	.97
18.00.......		1.12		.26	68.00........	4.22	.99
19.00.......		1.18		.28	69.00........	4.28	1.00
20.00.......		1.24		.29	70.00........	4.34	1.02
21.00.......		1.30		.30	71.00........	4.40	1.03
22.00.......		1.36		.32	72.00........	4.46	1.04
23.00.......		1.43		.33	73.00........	4.53	1.06
24.00.......		1.49		.35	74.00........	4.59	1.07
25.00.......		1.55		.36	75.00........	4.65	1.09
26.00.......		1.61		.38	76.00........	4.71	1.10
27.00.......		1.67		.39	77.00........	4.77	1.12
28.00.......		1.74		.41	78.00........	4.84	1.13
29.00.......		1.80		.42	79.00........	4.90	1.15
30.00.......		1.86		.44	80.00........	4.96	1.16
31.00.......		1.92		.45	81.00........	5.02	1.17
32.00.......		1.98		.46	82.00........	5.08	1.19
33.00.......		2.05		.48	83.00........	5.15	1.20
34.00.......		2.11		.49	84.00........	5.21	1.22
35.00.......		2.17		.51	85.00........	5.27	1.23
36.00.......		2.23		.52	86.00........	5.33	1.25
37.00.......		2.29		.54	87.00........	5.39	1.26
38.00.......		2.36		.55	88.00........	5.46	1.28
39.00.......		2.42		.57	89.00........	5.52	1.29
40.00.......		2.48		.58	90.00........	5.58	1.31
41.00.......		2.54		.59	91.00........	5.64	1.32
42.00.......		2.60		.61	92.00........	5.70	1.33
43.00.......		2.67		.62	93.00........	5.77	1.35
44.00.......		2.73		.64	94.00........	5.83	1.36
45.00.......		2.79		.65	95.00........	5.89	1.38
46.00.......		2.85		.67	96.00........	5.95	1.39
47.00.......		2.91		.68	97.00........	6.01	1.41
48.00.......		2.98		.70	98.00........	6.08	1.42
49.00.......		3.04		.71	99.00........	6.14	1.44
50.00.......		3.10		.73	100.00........	6.20	1.45

In addition to withholding Medicare tax at 1.45%, you must withhold a 0.9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. You’re required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Additional Medicare Tax is only imposed on the employee. There is no employer share of Additional Medicare Tax. All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold.

Page 8Publication 926 (2021)

Federal Unemployment (FUTA) Tax

The federal unemployment tax is part of the federal and state program under the Federal Unemployment Tax Act (FUTA) that pays unemployment compensation to work-ers who lose their jobs. Like most employers, you may owe both the federal unemployment tax (the FUTA tax) and a state unemployment tax. Or you may owe only the FUTA tax or only the state unemployment tax. To find out whether you will owe state unemployment tax, contact your state's unemployment tax agency. For a list of state unemployment tax agencies, visit the U.S. Department of Labor's website at oui.doleta.gov/unemploy/agencies.asp. You should also find out if you need to pay or collect other state employment taxes or carry workers' compensation insurance.

The FUTA tax is 6.0% of your employee's FUTA wa-ges. However, you may be able to take a credit of up to 5.4% against the FUTA tax, resulting in a net tax rate of

0.6%. Your credit for 2021 is limited unless you pay all the required contributions for 2021 to your state unemploy-ment fund by April 15, 2022. The credit you can take for any contributions for 2021 that you pay after April 15, 2022, is limited to 90% of the credit that would have been allowable if the contributions were paid on or before that day.

Note. The 5.4% credit is reduced for wages paid in a credit reduction state. See the Instructions for Schedule H (Form 1040).

Don't withhold the FUTA tax from your employ-_!ee's wages. You must pay it from your own funds.

CAUTION

FUTA wages. Figure the FUTA tax on the FUTA wages you pay. If you pay cash wages to all your household em-ployees totaling $1,000 or more in any calendar quarter of 2020 or 2021, the first $7,000 of cash wages you pay to each household employee in 2021 is FUTA wages. (A cal-endar quarter is January through March, April through June, July through September, or October through De-cember.) If your employee's cash wages reach $7,000 during the year, don't figure the FUTA tax on any wages you pay that employee during the rest of the year. For an explanation of cash wages, see Social security and Medi-care wages under Social Security and Medicare Taxes, earlier.

Wages not counted. Don't count wages you pay to any of the following individuals as FUTA wages.

Your spouse.

Your child who is under the age of 21.

Your parent.

Do You Need To Withhold Federal Income Tax?

You’re not required to withhold federal income tax from wages you pay a household employee. You should with-hold federal income tax only if your household employee asks you to withhold it and you agree. The employee must give you a completed Form W-4.

If you and your employee have agreed to withholding, either of you may end the agreement by letting the other know in writing.

If you agree to withhold federal income tax, you’re re-sponsible for paying it to the IRS. Pay the tax as dis-cussed under How Do You Make Tax Payments, later. Also see What Forms Must You File , later.

Use the federal income tax withholding tables in Pub.

15-T to find out how much to withhold. Figure federal in-come tax withholding on taxable wages before you deduct any amounts for other withheld taxes. Withhold federal in-come tax from each payment of wages based on the infor-mation included on your employee's Form W-4. Pub. 15-T contains detailed instructions.

Wages. Figure federal income tax withholding on both cash and noncash wages you pay. Although wages paid to a child, spouse, or parent may be excluded from social security, Medicare, and FUTA taxes as described earlier, these wages are still subject to federal income tax. Meas-ure wages you pay in any form other than cash by the fair market value of the noncash item.

Don't count as wages any of the following items.

Meals provided to your employee at your home for your convenience.

Lodging provided to your employee at your home for your convenience and as a condition of employment.
Up to $270 a month for 2021 for transit passes you give your employee or for any cash reimbursement you make for the amount your employee pays for transit passes used to commute to your home if you qualify for this exclusion. (See Pub. 15-B for special requirements for this exclusion.) A transit pass in-cludes any pass, token, fare card, voucher, or similar item entitling a person to ride on mass transit, such as a bus or train.

Up to $270 a month for 2021 for the value of parking you provide your employee or for any cash reimburse-ment you make for the amount your employee pays and substantiates for parking at or near your home or at or near a location from which your employee com-mutes to your home.

See section 5 of Pub. 15 for more information on cash and noncash wages, and Pub. 15-B for more information on fringe benefits.

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Paying tax without withholding. Any income tax you pay for your employee without withholding it from the em-ployee's wages must be included in the employee's wa-ges for federal income tax purposes. It must also be inclu-ded in social security and Medicare wages and in federal unemployment (FUTA) wages.

What Do You Need To Know About the Earned Income Credit?

Certain workers can take the earned income credit (EIC) on their federal income tax return. This credit reduces their tax or allows them to receive a payment from the IRS.

Notice about the EIC. You must give your household employee a notice about the EIC if you agree to withhold federal income tax from the employee's wages (as dis-cussed earlier under Do You Need To Withhold Federal Income Tax?) and the federal income tax withholding ta-bles show that no tax should be withheld. Even if not re-quired, you’re encouraged to give the employee a notice about the EIC if his or her 2020 wages were less than $50,954 ($56,844 if married filing jointly).

Copy B of Form W-2 has a statement about the EIC on the back. If you give your employee that copy by January 31, you don't have to give the employee any other notice about the EIC.

If you don't give your employee Copy B of the Form W-2, your notice about the EIC can be any of the following items.

1. A substitute Form W-2 with the same EIC information on the back of the employee's copy that is on Copy B of IRS Form W-2.

2. Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC).

3. Your own written statement with the same wording as in Notice 797.

If a substitute Form W-2 is given on time but doesn't have the required EIC information, you must notify the em-ployee within 1 week of the date the substitute Form W-2 is given. If Form W-2 is required but isn't given on time, you must give the employee Notice 797 or your written statement about the EIC by January 31. If Form W-2 isn't required, you must notify the employee by February 7.

How Do You Make Tax Payments?

When you file your 2021 federal income tax return in 2022, attach Schedule H (Form 1040) to your Form 1040, 1040-SR, 1040-NR, 1040-SS, or 1041. Use Schedule H

Page 10

to figure your total household employment taxes (social security, Medicare, FUTA, and withheld federal income). Add these household employment taxes to your income tax. Pay the amount due by April 15, 2022. For more infor-mation about using Schedule H, see Schedule H under What Forms Must You File, later.

You can avoid owing tax with your return if you pay enough tax during the year to cover your household em-ployment taxes, as well as your income tax. You can pay the additional tax in any of the following ways.

Ask your employer to withhold more federal income tax from your wages in 2021.

Ask the payer of your pension or annuity to withhold more federal income tax from your benefits.
Make estimated tax payments for 2021 to the IRS.

Increase your payments if you already make estima-ted tax payments.

You may be subject to the estimated tax under-! payment penalty if you didn't pay enough income CAUTION and household employment taxes during the year. (See Pub. 505 for information about the underpay-ment penalty.) However, you won't be subject to the pen-

alty if both of the following situations apply to you.

• You won't have federal income tax withheld from wa-ges, pensions, or any other payments you receive.

• Your income taxes, excluding your household employ-ment taxes, wouldn't be enough to require payment of estimated taxes.

Asking for more federal income tax withholding. If you’re employed and want more federal income tax with-held from your wages to cover your household employ-ment taxes, give your employer a new Form W-4. Com-plete Form W-4 and show the additional amount you want withheld from each paycheck on the appropriate line of Form W-4.

If you receive a pension or annuity and want more fed-eral income tax withheld to cover household employment taxes, give the payer a new Form W-4P (or a similar form provided by the payer). Complete Form W-4P and show the additional amount you want withheld from each benefit payment on the appropriate line of Form W-4P.

See Pub. 505 to make sure you will have the right amount withheld. It will help you compare your total ex-pected withholding for 2021 with the combined income tax and employment taxes that you can expect to figure on your 2021 tax return. You may also use the IRS Tax With-holding Estimator available at IRS.gov/W4App to estimate the amount of your federal income taxes.

Paying estimated tax. If you want to make estimated tax payments to cover household employment taxes, get Form 1040-ES. You can use its payment vouchers to make your payments by check or money order. Estimated tax payments can also be made by cash, credit or debit card, and several electronic payment methods. For de-tails, see the form instructions or go to IRS.gov/Payments.

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You can pay all the employment taxes at once or you can pay them in installments. If you have already made some estimated tax payments for 2021, you should in-crease your remaining payments to cover the employment taxes. Estimated tax payments for 2021 are due April 15, June 15, and September 15, 2021, and January 18, 2022.

Payment option for business employers. If you own a business or a farm operated for profit, you can choose ei-ther of two ways to pay your 2021 household employment taxes. You can pay them with your federal income tax as previously described, or you can include them with your federal employment tax deposits or other payments for your business or farm employees. For information on de-positing employment taxes, see section 11 of Pub. 15.

If you pay your household employment taxes with your business or farm employment taxes, you must report your household employment taxes with those other employ-ment taxes on Form 941, Employer's QUARTERLY Fed-eral Tax Return; Form 944, Employer's ANNUAL Federal Tax Return; or Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, and on Form 940, Em-ployer's Annual Federal Unemployment (FUTA) Tax Re-turn. See Business employment tax returns, later.

The deduction that can be taken on Schedules C ! and F (Form 1040) for wages and employment CAUTION taxes applies only to wages and taxes paid for business and farm employees. You can't deduct the wa-ges and employment taxes paid for your household em-

ployees on your Schedule C or F.

More information. For more information about paying taxes through federal income tax withholding and estima-ted tax payments, and figuring the estimated tax penalty, see Pub. 505.

What Forms Must You File?

You must file certain forms to report your household em-ployee's wages and the federal employment taxes for the employee if you pay any of the following wages to the em-ployee.

Social security and Medicare wages.

FUTA wages.

Wages from which you withhold federal income tax.

For information on getting employment tax forms, see How To Get Tax Help , later.

Employer identification number (EIN). You must in-clude your EIN on the forms you file for your household employee. An EIN is a nine-digit number issued by the IRS. It isn't the same as a social security number (SSN).

You will ordinarily have an EIN if you previously TIP paid taxes for employees, either as a household employer or as a sole proprietor of a business you

own. If you already have an EIN, use that number.

Publication 926 (2021)

If you don't have an EIN, you may apply for one online by going to IRS.gov/EIN. You may also apply for an EIN by faxing or mailing Form SS-4 to the IRS. If you are an international applicant, you may apply for an EIN by call-ing 267-941-1099 (toll call), Monday through Friday from 6:00 a.m. to 11:00 p.m. Eastern time.

Form W-2. File a separate 2021 Form W-2 for each household employee to whom you pay either of the follow-ing wages during the year.

Social security and Medicare wages of $2,300 or more.

Wages from which you withhold federal income tax.

You must complete Form W-2 and give Copies B, C, and 2 to your employee by January 31, 2022. You must also send Copy A of Form W-2 with Form W-3, to the SSA by January 31, 2022. We encourage you to file Form W-2 electronically. Electronic filing is available to all employers and is free, fast, and secure. Visit the SSA's Employer W-2 Filing Instructions & Information website at SSA.gov/ employer for guidelines on filing electronically. If filing electronically via the SSA's W-2 Online service, the SSA will generate Form W-3 data from the electronic submis-sion of Form(s) W-2; no separate Form W-3 is required.

If you're not required to file Form W-2, we encourage you to provide your household employee with a receipt for services that includes the dates worked, wages paid, and a general description of work completed. This receipt will help the household employee to report his or her wages on Form 1040 or 1040-SR.

Employee who leaves during the year. If an em-ployee stops working for you before the end of 2021, you can file Form W-2 and provide copies to your employee immediately after you make your final payment of wages. You don't need to wait until 2022. If the employee asks you for Form W-2, give it to him or her within 30 days after the request or the last wage payment, whichever is later.

Schedule H. Use Schedule H (Form 1040) to report household employment taxes if you pay any of the follow-ing wages to the employee.

Social security and Medicare wages of $2,300 or more.

FUTA wages.

Wages from which you withhold federal income tax.

File Schedule H (Form 1040) with your 2021 federal in-come tax return by April 15, 2022. If you get an extension to file your return, the extension will also apply to your Schedule H (Form 1040).

Filing options when no return is required. If you’re not required to file a 2021 tax return, you have the follow-ing two options.

1. You can file Schedule H by itself. See the Schedule H (Form 1040) instructions for details.

2. If, besides your household employee, you have other employees for whom you report employment taxes on Form 941, Form 944, or Form 943 and on Form 940,

Page 11

you can include your taxes for your household em-ployee on those forms. See Business employment tax returns next.

Employers having the options listed above include cer-tain tax-exempt organizations that don't have to file a tax return, such as churches that pay a household worker to take care of a minister's home.

Business employment tax returns. Don't use Sched-ule H if you choose to pay the employment taxes for your household employee with business or farm employment taxes. (See Payment option for business employers, ear-lier.) 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.

If you report the employment taxes for your household employee on Form 941, Form 944, or Form 943, file Form W-2 for that employee with the Forms W-2 and Form W-3 for your business or farm employees.

For information on filing Form 941 or Form 944, see Pub. 15. For information on filing Form 943, see Pub. 51. Both of these publications also provide information about filing Form 940.

What Records Must You Keep?

Keep your copies of Schedule H (Form 1040) or other employment tax forms you file and related RECORDS Forms W-2, W-3, and W-4. You must also keep

records to support the information you enter on the forms you file. If you must file Form W-2, you will need to keep a record of your employee's name, address, and SSN.

Wage and tax records. On each payday, you should re-cord the date and amounts of all the following items.

Your employee's cash and noncash wages.

Any employee social security tax you withhold or agree to pay for your employee.

Any employee Medicare tax you withhold or agree to pay for your employee.

Any federal income tax you withhold.

Any state employment taxes you withhold.

Employee's SSN. You must keep a record of your em-ployee's name and SSN exactly as they appear on his or her social security card if you pay the employee either of the following.

Social security and Medicare wages of $2,300 or more.

Wages from which you withhold federal income tax.

You must ask for your employee's SSN no later than the first day on which you pay the wages. You may consider asking for it when you hire your employee. You should ask your employee to show you his or her social security card.

Page 12

The employee may show the card if it is available. You may, but aren't required to, photocopy the card if the em-ployee provides it.

An employee who doesn't have an SSN must apply for one on Form SS-5, Application for a Social Security Card. An employee who has lost his or her social security card or whose name isn't correctly shown on the card may ap-ply for a replacement card.

You can download Form SS-5 from the SSA web-site at SSA.gov/online/ss-5.pdf.

Employees can also get Form SS-5 from any SSA office or by calling 800-772-1213.

How long to keep records. Keep your employment tax records for at least 4 years after the due date of the return on which you report the taxes or the date the taxes were paid, whichever is later.

Can You Claim a Credit for Child and Dependent Care Expenses?

If your household employee cares for your dependent who is under age 13 or for your spouse or dependent who isn't capable of self-care, you may be able to take an income tax credit against some of your expenses. To qualify, you must pay these expenses so you can work or look for work. If you can take the credit, you can include in your qualifying expenses your share of the federal and state employment taxes you pay, as well as the employee's wa-ges. For information about the credit, see Pub. 503.

How Can You Correct Schedule H?

If you discover that you made an error on a Schedule H (Form 1040) (or Anexo H-PR (Form 1040-PR), the forms used to correct the error depend on whether the Sched-ule H was attached to another form or whether it was filed by itself.

Schedule H attached to another form. If you discover an error on a Schedule H that you previously filed with Form 1040, Form 1040-SR, Form 1040-NR, or Form 1040-SS, file Form 1040-X, Amended U.S. Individual In-come Tax Return, and attach a corrected Schedule H. If you filed Form 1040-PR, file a Form 1040-X and attach a corrected Anexo H-PR. If you discover an error on a Schedule H that you previously filed with Form 1041, U.S. Income Tax Return for Estates and Trusts, file an “amen-ded” Form 1041 and attach a corrected Schedule H. You discovered (that is, ascertained) the error when you had enough information to be able to correct the error. Write

Publication 926 (2021)

“CORRECTED” (or “CORREGIDO”) and the date you dis-covered the error in the top margin of your corrected Schedule H (or Anexo H-PR), in bold letters. In addition, explain the reason for your correction and the date the er-ror was discovered in Part III of Form 1040-X or in a state-ment attached to the amended Form 1041.

Schedule H filed by itself. If you discover an error on a Schedule H (or Anexo H-PR) that you filed as a stand-alone return, file another stand-alone Schedule H with the corrected information. You discovered (that is, as-certained) the error when you had enough information to be able to correct the error. Write “CORRECTED” (or “CORREGIDO”) and the date you discovered the error in the top margin of your corrected Schedule H (or Anexo H-PR), in bold letters. In addition, explain the reason for your correction and the date the error was discovered in a statement attached to the corrected Schedule H. If you have an overpayment, also write “ADJUSTED” (or “COR-REGIDO”) or “REFUND” (or “REEMBOLSO”) in the top margin, depending on whether you want to adjust your overpayment or claim a refund. (See Overpayment of tax, later.)

When to file. File a corrected Schedule H when you dis-cover an error on a previously filed Schedule H. If you’re correcting an underpayment, file a corrected Schedule H no later than the due date of your next tax return (gener-ally, April 15 of the following calendar year) after you dis-cover the error. If you’re correcting an overpayment, file a corrected Schedule H within the refund period of limita-tions (generally, 3 years from the date your original form was filed or within 2 years from the date you paid the tax, whichever is later).

Underpayment of tax. You must pay any underpayment of social security and Medicare taxes by the time you file the corrected Schedule H. Generally, by filing on time and paying by the time you file the return, you won't be charged interest (and won't be subject to failure-to-pay or estimated tax penalties) on the balance due. However, underreported FUTA taxes will be subject to interest.

Overpayment of tax. You may either adjust or claim a refund of an overpayment of social security and Medicare taxes on a previously filed Schedule H. However, if you’re correcting an overpayment and are filing the corrected Schedule H within 90 days of the expiration of the period of limitations, you can only claim a refund of the overpay-ment.

Adjust the overpayment. If the corrected Sched-ule H is filed with a Form 1040-X or an amended Form 1041, adjust your return by indicating on line 23 of the Form 1040-X or on line 30a of the Form 1041 that you would like the overpayment applied to your estimated taxes on Form 1040, Form 1040-SR, Form 1040-NR, Form 1040-PR, Form 1040-SS, or Form 1041 for the year in which you’re filing the corrected Schedule H. If the cor-rected Schedule H is filed as a stand-alone return, adjust your return by writing “ADJUSTED” (or “CORREGIDO”) in the top margin (in bold letters). If you adjust your return,

Publication 926 (2021)

you won't receive interest on your overpayment. If the cor-rected Schedule H will be filed within 90 days of the expi-ration of the refund period of limitations, you may not ad-just the return and must claim a refund for the overpayment. You may not adjust your return to correct overpayments of FUTA tax.

Claim for refund process. If the corrected Sched-ule H is filed with a Form 1040-X or an amended Form 1041, claim a refund by indicating that you would like the overpayment refunded to you on Form 1040-X, line 22, or Form 1041, line 30b. If the corrected Schedule H is filed as a stand-alone return, claim a refund by writing “RE-FUND” (or “REEMBOLSO”) in the top margin (in bold let-ters). You will receive interest on any overpayment refun-ded, unless the overpayment is for FUTA tax because you were entitled to increased credits for state contributions.

Required repayment or consent. If you previously overreported social security and Medicare taxes, you may adjust your overpayment only after you’ve repaid or reim-bursed your employees the amount of the overcollection of employee tax. You reimburse your employees by apply-ing the overwithheld amount against taxes to be withheld on future wages. You may claim a refund for the overpay-ment only after you’ve repaid or reimbursed your employ-ees the amount of the overcollection or you’ve obtained consents from your employees to file the claim for refund for the employee tax. Include a statement that you repaid or reimbursed your employees, or obtained their written consents in the case of a claim for refund, in Part III of Form 1040-X or in a statement attached to the amended Form 1041 or the stand-alone corrected Schedule H.

Filing required for Forms W-2 or Forms W-2c. Whether you previously underreported tax or overreported tax, you will generally be required to file Form W-2, or their territorial equivalents (if none was previously filed), or Form W-2c, Corrected Wage and Tax Statement, to re-flect the changes reported on your corrected Schedule H.

Additional Medicare Tax. Generally, you may not cor-rect an error in Additional Medicare Tax withholding for wages paid to employees in a prior-year unless it is an ad-ministrative error. An administrative error occurs if the amount you entered on Schedule H isn't the amount you actually withheld. For example, if the Additional Medicare Tax actually withheld was incorrectly reported on Sched-ule H due to a mathematical or transposition error, this would be an administrative error. If a prior year error was a nonadministrative error, you may correct only the wages subject to Additional Medicare Tax withholding.

Any underwithheld Additional Medicare Tax must be recovered from employees on or before the last day of the calendar year in which the underwithholding occurred. Any excess Additional Medicare Tax withholding must be repaid or reimbursed to employees before the end of the calendar year in which it was withheld.

Additional information. For more information about cor-recting errors on a previously filed Schedule H, see Form 944-X, page 4, Form 944-X: Which process should you

Page 13

use? and the Instructions for Form 944-X (substitute “Schedule H” for “Form 944-X”). Also go to IRS.gov/ CorrectingEmploymentTaxes for general information about correcting employment taxes.

How To Get Tax Help

If you have questions about a tax issue, need help prepar-ing your tax return, or want to download free publications, forms, or instructions, go to IRS.gov and find resources that can help you right away.

Preparing and filing your tax return. After receiving all your wage and earnings statements (Form W-2, W-2G, 1099-R, 1099-MISC, 1099-NEC, etc.); unemployment compensation statements (by mail or in a digital format) or other government payment statements (Form 1099-G); and interest, dividend, and retirement statements from banks and investment firms (Forms 1099), you have sev-eral options to choose from to prepare and file your tax re-turn. You can prepare the tax return yourself, see if you qualify for free tax preparation, or hire a tax professional to prepare your return.

Free options for tax preparation. Go to IRS.gov to see your options for preparing and filing your return online or in your local community, if you qualify, which include the following.

Free File. This program lets you prepare and file your federal individual income tax return for free using brand-name tax-preparation-and-filing software or Free File fillable forms. However, state tax preparation may not be available through Free File. Go to IRS.gov/ FreeFile to see if you qualify for free online federal tax preparation, e-filing, and direct deposit or payment op-tions.

VITA. The Volunteer Income Tax Assistance (VITA) program offers free tax help to people with low-to-moderate incomes, persons with disabilities, and limited-English-speaking taxpayers who need help preparing their own tax returns. Go to IRS.gov/ VITA, download the free IRS2Go app, or call

800-906-9887 for information on free tax return prepa-ration.

TCE. The Tax Counseling for the Elderly (TCE) pro-gram offers free tax help for all taxpayers, particularly those who are 60 years of age and older. TCE volun-teers specialize in answering questions about pen-sions and retirement-related issues unique to seniors. Go to IRS.gov/TCE, download the free IRS2Go app, or call 888-227-7669 for information on free tax return preparation.

MilTax. Members of the U.S. Armed Forces and qualified veterans may use MilTax, a free tax service offered by the Department of Defense through Military OneSource.

Also, the IRS offers Free Fillable Forms, which can be completed online and then filed electronically regardless of income.

Page 14

Using online tools to help prepare your return. Go to IRS.gov/Tools for the following.

The Earned Income Tax Credit Assistant (IRS.gov/ EITCAssistant) determines if you’re eligible for the earned income credit (EIC).

The Online EIN Application (IRS.gov/EIN) helps you get an employer identification number (EIN).

The Tax Withholding Estimator (IRS.gov/W4APP) makes it easier for everyone to pay the correct amount of tax during the year. The tool is a convenient, online way to check and tailor your withholding. It’s more user-friendly for taxpayers, including retirees and self-employed individuals. The features include the following.

– Easy to understand language.

– The ability to switch between screens, correct pre-vious entries, and skip screens that don’t apply.

– Tips and links to help you determine if you qualify for tax credits and deductions.

– A progress tracker.

– A self-employment tax feature.

– Automatic calculation of taxable social security ben-efits.

The First-Time Homebuyer Credit Account Look-up (IRS.gov/HomeBuyer) tool provides information on your repayments and account balance.

The Sales Tax Deduction Calculator (IRS.gov/ SalesTax) figures the amount you can claim if you itemize deductions on Schedule A (Form 1040).

Getting answers to your tax questions. On IRS.gov, you can get up-to-date information on current events and changes in tax law.

IRS.gov/Help: A variety of tools to help you get an-swers to some of the most common tax questions.
IRS.gov/ITA: The Interactive Tax Assistant, a tool that will ask you questions on a number of tax law topics and provide answers.

IRS.gov/Forms: Find forms, instructions, and publica-tions. You will find details on 2020 tax changes and hundreds of interactive links to help you find answers to your questions.

You may also be able to access tax law information in your electronic filing software.

Need someone to prepare your tax return? There are various types of tax return preparers, including tax prepar-ers, enrolled agents, certified public accountants (CPAs), attorneys, and many others who don’t have professional credentials. If you choose to have someone prepare your tax return, choose that preparer wisely. A paid tax pre-parer is:

Primarily responsible for the overall substantive accu-racy of your return,

Publication 926 (2021)

Required to sign the return, and

Required to include their preparer tax identification number (PTIN).

Although the tax preparer always signs the return, you're ultimately responsible for providing all the informa-tion required for the preparer to accurately prepare your return. Anyone paid to prepare tax returns for others should have a thorough understanding of tax matters. For more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer on IRS.gov.

Coronavirus. Go to IRS.gov/Coronavirus for links to in-formation on the impact of the coronavirus, as well as tax relief available for individuals and families, small and large businesses, and tax-exempt organizations.

Tax reform. Tax reform legislation affects individuals, businesses, and tax-exempt and government entities. Go to IRS.gov/TaxReform for information and updates on how this legislation affects your taxes.

Employers can register to use Business Services On-line. The Social Security Administration (SSA) offers on-line service at SSA.gov/employer for fast, free, and secure online W-2 filing options to CPAs, accountants, enrolled agents, and individuals who process Form W-2, Wage and Tax Statement, and Form W-2c, Corrected Wage and Tax Statement.

IRS social media. Go to IRS.gov/SocialMedia to see the various social media tools the IRS uses to share the latest information on tax changes, scam alerts, initiatives, prod-ucts, and services. At the IRS, privacy and security are paramount. We use these tools to share public informa-tion with you. Don’t post your SSN or other confidential in-formation on social media sites. Always protect your iden-tity when using any social networking site.

The following IRS YouTube channels provide short, in-formative videos on various tax-related topics in English, Spanish, and ASL.

Youtube.com/irsvideos.

Youtube.com/irsvideosmultilingua.

Youtube.com/irsvideosASL.

Watching IRS videos. The IRS Video portal (IRSVideos.gov) contains video and audio presentations for individuals, small businesses, and tax professionals.

Online tax information in other languages. You can find information on IRS.gov/MyLanguage if English isn’t your native language.

Free interpreter service. Multilingual assistance, provi-ded by the IRS, is available at Taxpayer Assistance Cen-ters (TACs) and other IRS offices. Over -the-phone inter-preter service is accessible in more than 350 languages.

Getting tax forms and publications. Go to IRS.gov/ Forms to view, download, or print most of the forms, in-structions, and publications you may need. You can also download and view popular tax publications and instruc-

Publication 926 (2021)

tions (including Pub. 926) on mobile devices as an eBook at IRS.gov/eBooks. Or you can go to IRS.gov/OrderForms to place an order.

Access your online account (individual taxpayers only). Go to IRS.gov/Account to securely access infor-mation about your federal tax account.

View the amount you owe, pay online, or set up an on-line payment agreement.

Access your tax records online.

Review your payment history.

Go to IRS.gov/SecureAccess to review the required identity authentication process.

Using direct deposit. The fastest way to receive a tax refund is to file electronically and choose direct deposit, which securely and electronically transfers your refund di-rectly into your financial account. Direct deposit also avoids the possibility that your check could be lost, stolen, or returned undeliverable to the IRS. Eight in 10 taxpayers use direct deposit to receive their refunds. The IRS issues more than 90% of refunds in less than 21 days.

Getting a transcript of your return. The quickest way to get a copy of your tax transcript is to go to IRS.gov/ Transcripts. Click on either “Get Transcript Online” or “Get Transcript by Mail” to order a free copy of your transcript. If you prefer, you can order your transcript by calling 800-908-9946.

Reporting and resolving your tax-related identity theft issues.

Tax-related identity theft happens when someone steals your personal information to commit tax fraud. Your taxes can be affected if your SSN is used to file a fraudulent return or to claim a refund or credit.

The IRS doesn’t initiate contact with taxpayers by email, text messages, telephone calls, or social media channels to request personal or financial information. This includes requests for personal identification num-bers (PINs), passwords, or similar information for credit cards, banks, or other financial accounts.

Go to IRS.gov/IdentityTheft, the IRS Identity Theft Central webpage, for information on identity theft and data security protection for taxpayers, tax professio-nals, and businesses. If your SSN has been lost or stolen or you suspect you’re a victim of tax-related identity theft, you can learn what steps you should take.

Get an Identity Protection PIN (IP PIN). IP PINs are six-digit numbers assigned to eligible taxpayers to help prevent the misuse of their SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return with your SSN. To learn more, go to IRS.gov/IPPIN.

Checking on the status of your refund.

Go to IRS.gov/Refunds.

Page 15

The IRS can’t issue refunds before mid-February 2021 for returns that claimed the EIC or the additional child tax credit (ACTC). This applies to the entire refund, not just the portion associated with these credits.
Download the official IRS2Go app to your mobile de-vice to check your refund status.
Call the automated refund hotline at 800-829-1954.

Making a tax payment. The IRS uses the latest encryp-tion technology to ensure your electronic payments are safe and secure. You can make electronic payments on-line, by phone, and from a mobile device using the IRS2Go app. Paying electronically is quick, easy, and faster than mailing in a check or money order. Go to IRS.gov/Payments for information on how to make a pay-ment using any of the following options.

IRS Direct Pay: Pay your individual tax bill or estima-ted tax payment directly from your checking or sav-ings account at no cost to you.

Debit or Credit Card: Choose an approved payment processor to pay online, by phone, or by mobile de-vice.
Electronic Funds Withdrawal: Offered only when filing your federal taxes using tax return preparation soft-ware or through a tax professional.
Electronic Federal Tax Payment System: Best option for businesses. Enrollment is required.
Check or Money Order: Mail your payment to the ad-dress listed on the notice or instructions.
Cash: You may be able to pay your taxes with cash at a participating retail store.
Same-Day Wire: You may be able to do same-day wire from your financial institution. Contact your finan-cial institution for availability, cost, and cut-off times.

What if I can’t pay now? Go to IRS.gov/Payments for more information about your options.

Apply for an online payment agreement (IRS.gov/ OPA) to meet your tax obligation in monthly install-ments if you can’t pay your taxes in full today. Once you complete the online process, you will receive im-mediate notification of whether your agreement has been approved.

Use the Offer in Compromise Pre-Qualifier to see if you can settle your tax debt for less than the full amount you owe. For more information on the Offer in Compromise program, go to IRS.gov/OIC.

Filing an amended return. You can now file Form 1040 -X electronically with tax filing software to amend 2019 Forms 1040 and 1040-SR. To do so, you must have e-filed your original 2019 return. Amended returns for all prior years must be mailed. See Tips for taxpayers who need to file an amended tax return and go to IRS.gov/ Form1040X for information and updates.

Checking the status of your amended return. Go to IRS.gov/WMAR to track the status of Form 1040-X amen-

Page 16

ded returns. Please note that it can take up to 3 weeks from the date you filed your amended return for it to show up in our system, and processing it can take up to 16 weeks.

Understanding an IRS notice or letter you’ve re-ceived. Go to IRS.gov/Notices to find additional informa-tion about responding to an IRS notice or letter.

Contacting your local IRS office. Keep in mind, many questions can be answered on IRS.gov without visiting an IRS Taxpayer Assistance Center (TAC). Go to IRS.gov/ LetUsHelp for the topics people ask about most. If you still need help, IRS TACs provide tax help when a tax issue can’t be handled online or by phone. All TACs now pro-vide service by appointment, so you’ll know in advance that you can get the service you need without long wait times. Before you visit, go to IRS.gov/OfficeLocator to find the nearest TAC and to check hours, available services, and appointment options. Or, on the IRS2Go app, under the Stay Connected tab, choose the Contact Us option and click on “Local Offices.”

The Taxpayer Advocate Service (TAS) Is Here To Help You

What Is TAS?

TAS is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Their job is to ensure that every taxpayer is treated fairly and that you know and understand your rights under the Taxpayer Bill of Rights.

What Can TAS Do For You?

TAS can help you resolve problems that you can’t resolve with the IRS. And their service is free. If you qualify for their assistance, you will be assigned to one advocate who will work with you throughout the process and will do everything possible to resolve your issue. TAS can help you if:

Your problem is causing financial difficulty for you, your family, or your business;

You face (or your business is facing) an immediate threat of adverse action; or

You’ve tried repeatedly to contact the IRS but no one has responded, or the IRS hasn’t responded by the date promised.

How Can You Reach TAS?

TAS has offices in every state, the District of Columbia, and Puerto Rico . Your local advocate’s number is in your local directory and at TaxpayerAdvocate.IRS.gov/ Contact-Us. You can also call them at 877-777-4778.

Publication 926 (2021)

How Else Does TAS Help Taxpayers?

TAS works to resolve large-scale problems that affect many taxpayers. If you know of one of these broad issues, please report it to them at IRS.gov/SAMS.

TAS for Tax Professionals

TAS can provide a variety of information for tax professio-nals, including tax law updates and guidance, TAS pro-grams, and ways to let TAS know about systemic prob-lems you’ve seen in your practice.

Low Income Taxpayer Clinics (LITCs)

LITCs are independent from the IRS. LITCs represent in-dividuals whose income is below a certain level and need

to resolve tax problems with the IRS, such as audits, ap-peals, and tax collection disputes. In addition, clinics can provide information about taxpayer rights and responsibili-ties in different languages for individuals who speak Eng-lish as a second language. Services are offered for free or a small fee for eligible taxpayers. To find a clinic near you, visit TaxpayerAdvocate.IRS.gov/about-us/Low-Income-Taxpayer-Clinics-LITC/ or see IRS Pub. 4134, Low Income Taxpayer Clinic List.

Publication 926 (2021)Page 17

Sample Form W-2 and Form W-3

Note. Although not shown, Mary also enters on Form W-2 and Form W-3 the required state or local income tax information (boxes 15–20 on Form W-2; boxes 15–19 on Form W-3).

Visit the SSA website at www.ssa.gov/employer to le Copy A of Form W-2 electronically.

22222

VOID

a Employee’s social security number

For Official Use Only

000-00-6789

OMB No. 1545-0008

b Employer identi cation number (EIN)

1 Wages, tips, other compensation

2 Federal income tax withheld

12-3456789

2300.00

c Employer’s name, address, and ZIP code

3

Social security wages

4 Social security tax withheld

Mary Brown

2300.00

142.60

5 Medicare wages and tips

6

Medicare tax withheld

20 Gray Street

2300.00

33.35

Anyplace, CA 92665

7

Social security tips

8

Allocated tips

d Control number

9

10

Dependent care bene ts

e Employee’s rst name and initial

Last name

Suff.

11

Nonquali ed plans

12a See instructions for box 12

C

Jane A.

Oak

o

e

d

13

Statutory

Retirement

Third-party

12b

employee

plan

sick pay

C

o

d

e

18 Pine Avenue

C

Anycity, CA 92666

14 Other

12c

e

o

d

12d

C

o

d

e

f Employee’s address and ZIP code

15 State

Employer’s state ID number

16 State wages, tips, etc.

17 State income tax

18 Local wages, tips, etc.

19 Local income tax

20 Locality name

_FormW-2 Wage and Tax Statement

2021

Department of the Treasury—Internal Revenue Service

For Privacy Act and Paperwork Reduction

Copy A—For Social Security Administration. Send this entire page with

Act Notice, see the separate instructions.

Form W-3 to the Social Security Administration; photocopies are not acceptable.

Cat. No. 10134D

33333

a

Control number

For Official Use Only

OMB No. 1545-0008

b

▲

941

Military

943

944

▲

None apply

501c non-govt.

Third-party

Kind

Kind

X

sick pay

of

of

(Check if

CT-1

Hshld.

Medicare

State/local

State/local 501c

Federal govt.

Payer

emp.

govt. emp.

Employer

non-501c

applicable)

(Check one)

X

(Check one)

c Total number of Forms W-2

d Establishment number

1 Wages, tips, other compensation

2 Federal income tax withheld

1

2300.00

e Employer identi cation number (EIN)

3 Social security wages

4 Social security tax withheld

12-3456789

2300.00

142.60

f Employer’s name

5 Medicare wages and tips

6 Medicare tax withheld

Mary Brown

2300.00

33.35

7 Social security tips

8 Allocated tips

20 Gray Street

9

10 Dependent care bene ts

Anyplace, CA 92665

11 Nonquali ed plans

12a Deferred compensation

g Employer’s address and ZIP code

h Other EIN used this year

13 For third-party sick pay use only

12b

15 State

Employer’s state ID number

14 Income tax withheld by payer of third-party sick pay

16 State wages, tips, etc.

17 State income tax

18 Local wages, tips, etc.

19 Local income tax

Employer’s contact person

Employer’s telephone number

For Of cial Use Only

123-456-7890

Employer’s fax number

Employer’s email address

Under penalties of perjury, I declare that I have examined this return and accompanying documents, and, to the best of my knowledge and belief, they are true, correct, and complete.

Signature	Mary Brown	Title		Date1/31/2022
Form W-3 Transmittal of Wage and Tax Statements			2021	Department of the Treasury
				Internal Revenue Service

Note. When you fill in Forms W-2 and W-3, please:

Type entries using black ink;

Enter all money amounts without the dollar sign and comma, but with the decimal point (for example, 2300.00 not $2,300.00); and

• Don’t round money amounts–show the cents portion.

Page 18Publication 926 (2021)

	To help us develop a more useful index, please let us know if you have ideas for index entries.

Index
	See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A

Additional Medicare Tax 6, 7 Assistance (See Tax help)

B

Babysitters (See Household employee) Baby-sitting costs (See Child and

dependent care expenses)

Business employers, employment tax payment option 11

Butlers (See Household employee)

C

Caretakers (See Household employee)

Certified professional employer organizations (CPEOs) 2

Child and dependent care expenses, credit for 12

Comments on publication 3 Cooks (See Household employee)

Correcting Schedule H:

Schedule H attached to another

form 12

Schedule H filed by itself 12 Credit reduction states 3

D

Dependent care expenses 12 Disability payments, state 6 Domestic worker (See Household

employee)

Drivers (See Household employee)

E

Earned income credit (EIC) 10 EIC notice 10

Employer identification number (EIN) 11

Employing an alien legally (See Legal employee)

Employment eligibility verification form 4

Employment taxes:

Need to pay 4

Payment options 11

Tax returns 12

Estimated tax, paying 10

F

Federal income tax withholding, increasing (See How to increase withholding)

Federal unemployment (FUTA) tax 9

Form:

1040-ES 10

940 12

941 12

943 12

944 12

I-9 4

Schedule H (Form 1040) 10, 11 SS-4 11

SS-5 12

W-2 10, 11

W-4 9, 10

W-4P 10

Forms you must file 11

FUTA ( See Federal Unemployment (FUTA) Tax)

H

Health aides (See Household employee) House cleaning

workers (See Household employee) Household employee 3 Housekeepers (See Household

employee)

How to increase withholding 10 How to pay estimated tax 10

I

Income tax withholding, increasing (See How to increase withholding)

L

Legal employee 4

M

Maids (See Household employee) Medicaid waiver payments 3 Medicare (See Social security and

Medicare taxes)

N

Nannies (See Household employee)

Nonemployees 4

Nurses, private (See Household employee)

O

Outsourcing payroll duties 3

P

Publications (See Tax help)

R

Records you must keep 12

S

Schedule H (Form 1040) 10, 11

Self-employed

workers (See Nonemployees)

Social security and Medicare:

Taxes 6

Wages 6

Social security number, employee's 12

State:

Disability payments 6

Employment taxes 5

Suggestions for publication 3

T

Tax credits:

Child and dependent care expenses 12 Earned income 10

Taxes:

How to make payments 10 Medicare 6

Social security 6

Tax help 14

U

Unemployment taxes:

Federal 9

State 5

USCIS website 4

W

Wages:

Cash 6

FUTA 9

Medicare 6

Social security 6

State disability payments 6

Withholding:

Employee's share 7

Federal income tax 9

How to increase 10

Wages 9

Y

Yard workers (See Household employee)

Publication 926 (2021)Page 19

IRS Releases Publication 926 (2021), Household Employer's Tax Guide