Help entering Schedule H with payroll service info into tax software

I'm struggling with how to properly enter my Schedule H information into my tax software. I have a nanny that I pay through a payroll service. The service handles withholding and paying Medicare and Social Security taxes quarterly, plus unemployment insurance. They haven't been withholding any federal income tax though (so Box 7 of Schedule H shows $0, while Box 8a has all the Medicare and Social Security taxes I've already paid). Here's my problem - both tax software programs I've tried ask me how much federal tax I withheld (which is zero), but never ask about the Social Security and Medicare taxes I've already paid through the payroll service. Then when I get to the end of filing, they tell me I owe all these Social Security taxes (the exact amount I've already paid!) and ask if I want to set up a payment plan. I feel like I'm taking crazy pills! I can't figure out where to indicate that I've already paid these taxes through my payroll service. I've tried the online help for both software programs and they've been completely useless. Has anyone dealt with this before? What am I missing here?

0 coins

18 comments

Rita Jacobs

•8M

This is a common issue with household employer reporting! The tax software is probably missing the field where you can enter those already-paid taxes because Schedule H isn't the most common form. When you get to the Schedule H section, look for an option specifically for "household employment taxes already paid" or sometimes labeled as "advance payments" or "quarterly payments." It's often tucked away in an "additional information" section. If you're using TurboTax, try clicking on "Other taxes" and then "Household employment taxes" and there should be a field for taxes already paid. If you still can't find it, try entering the information as a payment on Form 1040 instead. These advance payments should be credited on the "payments" section of your return, not on Schedule H itself - which might be why you're having trouble.

0 coins

Rita Jacobs

•8M

The "already paid" section should primarily cover the federal Social Security and Medicare taxes (FICA). For state unemployment taxes, you'll need to handle those separately on your state return. Most payroll services will provide a breakdown showing federal vs. state taxes in their year-end summary or tax reports. Look for a detailed report that separates FUTA (federal unemployment) from SUTA (state unemployment). The FUTA goes on your Schedule H, while the SUTA goes on your state filing forms. If your report doesn't clearly separate these, contact your payroll service - they should be able to provide the breakdown you need.

0 coins

Ben Cooper

•8M

After spending hours fighting with TurboTax over this exact same issue, I discovered taxr.ai (https://taxr.ai) which was a lifesaver for my household employee situation. I uploaded my payroll service reports and Schedule H, and it instantly identified where I needed to enter the already-paid Medicare and Social Security taxes. It showed me exactly which screens in my tax software had the hidden fields for reporting quarterly payments. The system flagged that I was potentially double-paying employment taxes and guided me through correctly recording my payroll service payments so they'd be properly credited. Saved me from overpaying by almost $3,800!

0 coins

Ben Cooper

•8M

You still use your regular tax software - taxr.ai analyzes your documents and tells you exactly which screens to navigate to and what to enter where. It's like having a tax pro looking over your shoulder and pointing out the hidden fields and checkboxes that the software doesn't make obvious. It saved me from the exact same Schedule H trap. For multiple state filings, yes it absolutely helps with that too. It identifies the correct forms for each state and shows you exactly what information needs to go where. It can analyze your payroll service reports and break down which amounts apply to which state based on employment dates and locations. Super helpful when you've got complicated multi-state situations like yours.

0 coins

Cynthia Love

•8M

Just wanted to update after trying taxr.ai for my Schedule H nightmare with my nanny who worked in multiple states. It was exactly what I needed! Uploaded my documents from the payroll service and it immediately identified the problem - my software was treating my quarterly payments as if they hadn't happened. The system showed me exactly where to click in H&R Block to find the hidden field for "advanced payments of household employment taxes" which wasn't visible in the regular interview process. It then walked me through each state form, showing what numbers went where. Saved me from accidentally double-paying over $4,200 in employment taxes! Will definitely use this again next year when I do my household employee taxes.

0 coins

Darren Brooks

•8M

If you're having trouble getting through to the IRS for clarification on this Schedule H issue (which I did for WEEKS), I highly recommend using Claimyr (https://claimyr.com). I was getting nowhere with the household employment tax department - constant busy signals or disconnects after waiting an hour. I was skeptical, but used their service and got connected to an actual IRS agent in 15 minutes who specialized in household employment taxes. They confirmed that I needed to report my payroll service payments differently and walked me through the exact form fields I needed to use. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c Without this I would have either overpaid or had to hire a specialized tax accountant which would have cost way more.

0 coins

Darren Brooks

•8M

It uses a system that navigates the IRS phone tree and holds your place in line so you don't have to. When an agent is about to pick up, it calls you and connects you. So you're getting the same IRS agents, just without the hours of waiting and repeated busy signals. They don't guarantee a specialist, but they did get me to someone in the right department who understood Schedule H issues. I was skeptical too - but after spending literally days trying to get through on my own, I was desperate. It worked exactly as advertised, and the agent I spoke with cleared up my confusion about where to report the payroll service payments on my forms.

0 coins

Elliott luviBorBatman

•8M

Alright, I'm eating my words here. After posting my skeptical comment yesterday, I decided to try Claimyr myself for my Schedule H issue. I've been trying to get through to the IRS for THREE WEEKS about my nanny tax situation. The service actually worked! Got a call back in about 20 minutes and was connected to someone who knew exactly how to handle household employment tax reporting when using a payroll service. The agent explained that there's a specific section on Form 1040 (not Schedule H itself) where I needed to claim credit for the Social Security and Medicare taxes already paid. Saved me hours of frustration and potentially thousands in overpaid taxes. Consider me converted from skeptic to believer.

0 coins

Demi Hall

•8M

Try this workaround: In most tax software, after you complete Schedule H, there should be a screen or section for "Payments Already Made" or "Estimated Tax Payments." Try entering your Social Security and Medicare tax payments there instead of on Schedule H itself. I had this exact issue with TaxAct last year. The software was calculating that I owed the employment taxes, but wasn't asking where to input what I'd already paid through my payroll service. I found that entering them as quarterly estimated tax payments fixed the issue.

0 coins

Demi Hall

•8M

You're right to be concerned. I should have been more specific. In most tax software, there's a difference between "estimated tax payments" (which are for income tax) and "other payments" which can include employment taxes. Look for a section called "Other Federal Tax Payments" or similar, which is separate from your regular estimated tax payments. This is where you can specify that these were payments for household employment taxes. The payroll service should be filing Form 941 or 944 showing these payments, so as long as you categorize them correctly, there shouldn't be any conflict.

0 coins