Updated October 19, 2026. Quick answer: Part II of Schedule H (Form 1040) figures federal unemployment (FUTA) tax on household employee wages. For 2025 the instructions say the tax applies to the first $7,000 paid to each employee at 6.0%, with a credit of up to 5.4% for state contributions that leaves a net rate of 0.6%.
Quick reference
| Item | As the IRS form or instructions state it |
|---|---|
| Wage base | “The FUTA tax applies to the first $7,000 you pay to each employee during a calendar year after subtracting any payments exempt from FUTA tax.” |
| Rate for 2025 | “The FUTA tax rate is 6.0% for 2025.” |
| State credit and net rate | “You may be able to take a credit of up to 5.4% against the FUTA tax, resulting in a net FUTA tax rate of 0.6%.” |
| State payment deadline for the full credit | “you must pay all the required contributions for 2025 to your state unemployment fund by April 15, 2026.” |
| Credit for later state payments | “is limited to 90% of the credit that would have been allowable if the contributions were paid on or before April 15, 2026.” |
| Wage trigger | “You need to pay federal unemployment tax under the FUTA, if you paid total cash wages of $1,000 or more in any calendar quarter of 2024 or 2025 to household employees.” |
| Lines in Part II | Lines 10 through 24, in Section A and Section B |
Who completes Part II and why the tax exists
“Together with state unemployment tax systems, the FUTA tax provides funds for paying unemployment compensation to workers who have lost their jobs.” The instructions also say “Most employers pay both a federal and a state unemployment tax.”
Part II is the employer’s own tax: “Only employers pay FUTA tax.” “Don’t collect or deduct FUTA tax from your employee’s wages.” “You must pay it from your own funds.”
The 2025 rate, the credit and state contributions
The base rate is “The FUTA tax rate is 6.0% for 2025.” The credit is described this way: “You may be able to take a credit of up to 5.4% against the FUTA tax, resulting in a net FUTA tax rate of 0.6%.”
On the word contributions, the instructions say “State unemployment taxes are sometimes called contributions.” “Contributions are payments that a state requires you, as an employer, to make to its unemployment fund for the payment of unemployment benefits.”
Timing affects the size of the credit. For contributions paid after the deadline, “The credit you can take for any state unemployment fund contributions for 2025 that you pay after April 15, 2026, is limited to 90% of the credit that would have been allowable if the contributions were paid on or before April 15, 2026.”
Lines 10 to 12 decide Section A or Section B
Three yes or no questions come first. Line 10 asks “Did you pay unemployment contributions to only one state?” Line 11 asks “Did you pay all state unemployment contributions for 2025 by April 15, 2026?” Line 12 asks “Were all wages that are taxable for FUTA tax also taxable for your state’s unemployment tax?”
The form then routes the filer: “If you checked the “Yes” box on all the lines above, complete Section A.” “If you checked the “No” box on any of the lines above, skip Section A and complete Section B.”
Section A, lines 13 to 16
Section A is the short path. Line 15 collects the wages, with a cap: “If you paid any household employee more than $7,000 in 2025, include on line 15 only the first $7,000 of that employee’s cash wages.” The instructions note the wages include “employees paid less than $1,000”.
Line 16 completes the section: “FUTA tax. Multiply the wages on line 15 by 0.6% (0.006). Enter the result on line 16.”
Section B, lines 17 to 24
The longer path has its own scope: “Complete lines 17 through 24 only if you checked a “No” box on line 10, 11, or 12.”
Line 21 is “Multiply the wages on line 20 by 6.0% (0.06).” Line 22 is “Multiply the wages on line 20 by 5.4% (0.054).” Line 23 reads “Enter the smaller of line 19 or line 22.” and line 24 reads “FUTA tax. Subtract line 23 from line 21.”
Two situations change line 23: “If you paid state unemployment contributions late, use Worksheet 1 to figure the amount to enter on line 23. If you’re in a credit reduction state, use Worksheet 2 to figure the amount to enter on line 23.”
Where Part II leads
Part III of the form starts with “Add line 16 (or line 24) and line 25” on line 26. See the Schedule H overview for filing dates and Part I for the social security and Medicare lines.
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
- Deducting FUTA tax from the employee’s pay: “Don’t collect or deduct FUTA tax from your employee’s wages.”
- Treating 6.0% as the usual net rate: the instructions describe a credit “resulting in a net FUTA tax rate of 0.6%”.
- Leaving out low paid employees from line 15: the instructions say to include “including employees paid less than $1,000”.
- Assuming late state payments earn the full credit: “is limited to 90% of the credit”.
Related: Schedule H instructions, Schedule H Part I, Form 941 instructions, Form 1040 instructions, 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.