Publication 926 - Household Employer'S Tax Guide - Internal Revenue Service

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Up to $125 (subject to change) per month for 2012

is not required, you must notify the employee by

for transit passes you give your employee (or for any

February 7, 2013.

cash reimbursement you make for the amount your

You must give your household employee a notice about

employee pays for transit passes used to commute

the EIC if you agree to withhold federal income tax from the

to your home if you qualify for this exclusion). A

employee’s wages (as discussed earlier under Do You

transit pass includes any pass, token, fare card,

Need To Withhold Federal Income Tax?) and the income

voucher, or similar item entitling a person to ride on

tax withholding tables show that no tax should be withheld.

mass transit, such as a bus or train. See Publication

Even if not required, you are encouraged to give the

15-B for special requirements for this exclusion.

employee a notice about the EIC if his or her 2012 wages

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Up to $240 per month for 2012 for the value of

are less than $36,920 ($42,130 if married filing joint).

parking you provide your employee or for any cash

reimbursement you make for the amount your em-

ployee pays and substantiates for parking at or near

How Do You Make

your home or at or near a location from which your

employee commutes to your home.

Tax Payments?

See Publication 15 (Circular E) for more information on

When you file your 2012 federal income tax return in 2013,

cash and noncash wages.

attach Schedule H (Form 1040), Household Employment

Taxes, to your Form 1040, 1040NR, 1040-SS, or 1041.

Paying tax without withholding. Any income tax you

Use Schedule H to figure your total household employment

pay for your employee without withholding it from the

employee’s wages must be included in the employee’s

taxes (social security, Medicare, FUTA, and withheld fed-

wages for federal income tax purposes. It also must be

eral income taxes). Add these household employment

included in social security and Medicare wages and in

taxes to your income tax. Pay the amount due by April 15,

federal unemployment (FUTA) wages.

2013. (For more information 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

What Do You Need To Know

enough tax during the year to cover your household em-

About the Earned Income

ployment taxes, as well as your income tax. You can pay

the additional tax in any of the following ways.

Credit?

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Ask your employer to withhold more federal income

tax from your wages in 2012.

Certain workers can take the earned income credit (EIC)

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Ask the payer of your pension or annuity to withhold

on their federal income tax return. This credit reduces their

more federal income tax from your benefits.

tax or allows them to receive a payment from the IRS. You

also may have to give your employee a notice about the

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Make estimated tax payments for 2012 to the IRS.

EIC.

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Increase your payments if you already make esti-

mated tax payments.

Notice about the EIC. Copy B of the 2012 Form W-2,

Wage and Tax Statement, has a statement about the EIC

on the back. If you give your employee that copy by

You may be subject to the estimated tax un-

January 31, 2013 (as discussed under Form W-2 under

derpayment penalty if you did not pay enough

What Forms Must You File, later), you do not have to give

income and household employment taxes during

CAUTION

the employee any other notice about the EIC.

the year. (See Publication 505, Tax Withholding and Esti-

If you do not give your employee Copy B of the Form

mated Tax, for information about the underpayment pen-

W-2, your notice about the EIC can be any of the following

alty.) However, you will not be subject to the penalty if both

items.

of the following situations apply to you.

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1. A substitute Form W-2 with the same EIC information

You will not have federal income tax withheld from

on the back of the employee’s copy that is on Copy B

wages, pensions, or any other payments you re-

of the Form W-2.

ceive.

2. Notice 797, Possible Federal Tax Refund Due to the

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Your income taxes, excluding your household em-

Earned Income Credit (EIC).

ployment taxes, would not be enough to require pay-

ment of estimated taxes.

3. Your own written statement with the same wording

as in Notice 797.

Asking for more federal income tax withholding. If you

are employed and want more federal income tax withheld

If a substitute Form W-2 is given on time but does not have

from your wages to cover your household employment

the required EIC information, you must notify the employee

taxes, give your employer a new Form W-4, Employee’s

within one week of the date the substitute Form W-2 is

Withholding Allowance Certificate. Complete it as before,

given. If Form W-2 is required but is not given on time, you

but show the additional amount you want withheld from

must give the employee Notice 797 or your written state-

each paycheck on line 6.

ment about the 2012 EIC by January 31, 2013. If Form W-2

Page 8

Publication 926 (March 2012)

Publication 926 - Household Employer'S Tax Guide - Internal Revenue Service - 2012 Page 8

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