In 2023, when is a taxpayer not required to file Schedule H?

To determine when a taxpayer is not required to file Schedule H, it’s important to understand the purpose of Schedule H, which is used to report household employment taxes. Taxpayers typically must file this form if they pay household employees above a certain threshold or meet other specific criteria.

In this scenario, option B is the correct choice because when a taxpayer pays a family member, such as a father, for work like installing a fence, that payment does not constitute household employment for the purposes of Schedule H, provided the payment is made in a casual or informal context. The IRS does not require filing for casual labor performed by family members, as these payments often fall outside the scope of formal employment standards.

Conversely, paying a neighbor, a family friend, or a sibling for services such as yard work, cleaning, or babysitting often implies a more formal employment relationship. These payments can trigger the requirement to file Schedule H, especially if they exceed the stipulated threshold for reporting household employment taxes. Therefore, option B stands out as the situation where the need to file does not arise, making it an exception in this context.