Which form is used to report wages for a household employee, and what additional form might be required?

• A. Schedule H with Form 1040; W-2 is never required.
• B. Schedule H with Form 1040; W-2 is mandatory for all household employees.
• C. Schedule H with Form 1040; may also require a W-2 for the employee.
• D. Schedule C; W-2 for the employee.

Answer: (C)

The key idea is how to handle payroll for a household employee. When you hire someone to work in your home, you report the wages and the associated payroll taxes on Schedule H, and you file that with Form 1040. Schedule H is specifically for household employment taxes like Social Security, Medicare, and FUTA.

Whether you also issue a Form W-2 to the employee depends on your situation. If you have withheld taxes or owe payroll taxes for the employee, you would provide a W-2 to the worker and file the corresponding W-3 with the SSA. If no payroll taxes are required, you may not need to issue a W-2, but you still report the wages on Schedule H.

So the best choice reflects both the use of Schedule H with Form 1040 and the conditional need for a W-2: it may also require a W-2 for the employee. The other options misstate the requirement for W-2 or suggest the wrong main form for household employees.