Updated October 19, 2026. Quick answer: On Schedule H (Form 1040) for 2025, line 5 collects cash wages paid to each employee above $200,000 and line 6 multiplies that amount by 0.9%. The instructions treat $200,000 as a withholding threshold that applies to wages already subject to Medicare tax. Medicare tax itself is figured on lines 3 and 4 at 2.9%.
Quick reference
| Item | As the IRS form or instructions state it |
|---|---|
| Form and year read | Schedule H (Form 1040) for 2025 and its instructions |
| Line 5 amount | “Enter the total cash wages (see Cash wages, earlier) paid to each employee in 2025 that exceeded $200,000.” |
| Line 6 rate | “Multiply the amount on line 5 by 0.9% (0.009). Enter the result on line 6.” |
| Line 4 rate | “Multiply the amount on line 3 by 2.9% (0.029). Enter the result on line 4.” |
| Which wages are covered | “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.” |
| Cash wage test for Medicare tax | “Social security and Medicare taxes apply to the wages of household workers you pay $2,800 or more in cash wages in 2025.” |
How lines 3 and 4 lead into line 5
Line 5 only makes sense after the ordinary Medicare lines. The instructions for line 3 say “Enter the total cash wages (see Cash wages, earlier) paid in 2025 to each employee who meets the $2,800 test, explained earlier.” They add a point that separates Medicare tax from social security tax: “There is no limit on wages subject to Medicare tax.”
Line 4 then applies the regular rate. The instructions say “Multiply the amount on line 3 by 2.9% (0.029). Enter the result on line 4.” The 2.9% on that line is the combined employee and employer share, so line 4 is not where the extra tax is reported.
The $2,800 test comes first. The What’s New section puts it this way: “Social security and Medicare taxes apply to the wages of household workers you pay $2,800 or more in cash wages in 2025.”
Line 5: wages above $200,000
Line 5 is narrow. The instructions say “Enter the total cash wages (see Cash wages, earlier) paid to each employee in 2025 that exceeded $200,000.” The test is applied employee by employee, not to the household as a whole.
The instructions also say which wages are in scope: “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.” Line 5 is used only when one employee’s cash wages exceed that amount in the year.
Line 6: the 0.9% calculation
Line 6 is a single multiplication. The instructions say “Multiply the amount on line 5 by 0.9% (0.009). Enter the result on line 6.” The result then feeds the Part I total on line 8, which is covered with the rest of Part I on the Schedule H Part I page.
The page for Part I explains who bears the tax and when withholding must start. This page stays on the two lines and the threshold they share.
When the employer pays the employee’s share
A household employer is responsible for the whole amount. The instructions say “You’re responsible for payment of your employee’s share of the taxes as well as your own.” They explain the choice: “You can either withhold your employee’s share from the employee’s wages or pay it from your own funds.”
If the employer pays without deducting, the instructions say “If you paid all of your employee’s share of social security and Medicare taxes, without deducting the amounts from the employee’s pay, the employee’s wages are increased by the amount of that tax for income tax withholding purposes.”
Where to go next
The full schedule is introduced on the Schedule H instructions page, the FUTA side is on Schedule H Part II, and the Form W-2 side is on the W-2, W-3 and record keeping page. The reconciliation form for employees with high wages is explained on the Form 8959 page, and the broader tax is on the Additional Medicare Tax page.
Where this comes from
The editions read for this page are Schedule H (Form 1040) (2025) and the Instructions for Schedule H (Form 1040) (2025), dated Dec 1, 2025, which are the revisions irs.gov served when they were read on 2026-10-19. Check the revision printed on the form you file, because a later revision can change the lines, the rates and the due dates. This page describes Schedule H (Form 1040) (2025), Household Employment Taxes; Instructions for Schedule H (Form 1040) (2025), as served on irs.gov on October 19, 2026. The IRS can revise a form after we read it, and the form you file and its own instructions control. Current and earlier revisions are listed on the IRS page Forms, Instructions and Publications. General information, not tax or legal advice.
Common mistakes
- Putting every dollar of wages on line 5. The instructions limit it to wages “that exceeded $200,000”.
- Treating line 4 as the extra tax. Line 4 multiplies by 2.9% and line 6 multiplies by 0.9%.
- Looking for a wage cap on Medicare tax. The instructions say “There is no limit on wages subject to Medicare tax.”
- Skipping the cash wage test. Medicare tax applies to workers paid “$2,800 or more in cash wages in 2025”.
Related: Schedule H instructions, Schedule H Part I, Schedule H W-2, W-3 and record keeping, Form 8959, Additional Medicare Tax, and Form 1040 line 1b household employee wages.
Sources
- Schedule H (Form 1040) (2025), Household Employment Taxes: https://www.irs.gov/pub/irs-pdf/f1040sh.pdf
- Instructions for Schedule H (Form 1040) (2025): https://www.irs.gov/pub/irs-pdf/i1040sh.pdf
Read from the IRS pages linked above on October 19, 2026. General information, not tax or legal advice. The IRS form and the instructions for your own form control, and your own facts decide the outcome.