A quick guide to Form 942

All employers and employees are required to file for taxes, even if these employees are not your regular office workers.

Even household staff are required to file their respective taxes as they are still employed under an employer. These taxes are filed using Form 942.

However, this form is no longer used and has been replaced by Schedule H of Form 1040.

Continue reading this article to learn more about Form 942 and how it worked.

What is Form 942?

See Form 942 (Rev. October 1990)

Form 942, also known as the Employer’s Quarterly Tax Return for Household Employees, was an official document that records and keeps track of the taxes of household workers.

This document was designed for employers who pay wages to domestic workers and file their employment taxes, such as Social Security and Medicare taxes, just like other forms.

This tax form is no longer in use and has been replaced by Schedule H of Form 1040.

Who can file Form 942?

Form 942 was to be filled out by household workers, such as nannies, caretakers, and housekeepers.

Additionally, if the employer of these workers paid them $50 or more in the calendar quarter for household work, then Form 942 must be filed.

When filing Form 942, it is helpful to distinguish the different kinds of household work these employees do that would be eligible for filing taxes.

The following tasks count as household work. If you have employees performing these duties under your employment, they are required to file Form 942:

• Babysitting
• Butler work
• Caregiving
• Cooking
• Cleaning
• Gardening
• Maid work
• Chauffeuring
• Janitorial work

Both the employer and employee were subject to Social Security and Medicare taxes. Both paid 6.2% tax for a combined total of 12.4% on Social Security tax. For Medicare tax, both paid 1.45% tax for a total of 2.9 %.

How to fill out Form 942

To file Form 942, write your name, address, employer identification number, and the calendar quarter. Change or cross out any wrong preprinted information if needed.

Do not forget to input the last day of the month of the calendar quarter in which the form is being filed. Furthermore, do not enter your social security number as your employee identification number, as the two are different.

Give each of your employees a Form W-2 and file copies with the Social Security Administration (SSA). From there, follow the instructions for each line accordingly:

• Line 1 – Total cash wage you paid to all employees in that quarter (This only applied to employees who were paid more than $50 in the quarter)
• Line 2 – Multiply the amount in Line 1 by 12.4% (0.124)
• Line 3 – Total wages paid to all employees in the quarter 
• Line 4 – Multiply the amount in Line 3 by 2.9% (0.029) – do not include employee wages not subject to Medicare tax
• Line 5 – Total amount of federal income tax withheld in the quarter
• Line 6 – The total of the amounts in Lines 2, 4, and 5

Special instructions when filing Form 942

As mentioned earlier, you must give each employee a Form W-2. Below Line 6 is a space to help you and your employees accomplish Form W-2. However, this is all optional.

• Box 19a and 19b – Write the employee’s name, address, and zip code
• Box 5 – Employee’s social security number
• Box 8 – Total amount of advanced Earned Income Credit payments made to employees in the quarter
• Box 9 – Federal income tax withheld
• Box 10 – Wages subject to income tax (cash and noncash, before tax deductions)
• Box 11 – Employee Social Security tax
• Box 12 – Wages subject to social security tax (cash wages only, before tax deductions)

Common mistakes when filing Form 942

A common mistake when filing Form 942 is miscalculating your tax information. If you have many employees, it may be difficult to keep track of the different numbers and taxes.

Remember to use the correct tax rates to avoid mistakes. Double-check each calculation to ensure its accuracy.

Another mistake is failing to file the form on time. Doing so will result in penalties or high-interest charges. 

Employers who encountered issues or made mistakes when filing the form were asked to contact the IRS for assistance. They also had the option to schedule a consultation or seek help from a third-party tax professional or firm for guidance.

When to file Form 942

Form 942 is due at the last day of the month for each quarter. For example, for the first quarter, which is January to March, the form is due on March 31st. This form must be filed quarterly.

If the due date falls on a weekend or holiday, you may file it on the next business day.