How to Pay Taxes as an Au Pair

Read the instructions on Form 1040-NR and consult the 2020 tax tables to determine what you may owe in federal taxes. Au Pairs are explicitly not entitled to the earned income tax credit, the hope credit or the lifetime learning credits. We have included a link to Form 1040-NR for the 2020 taxation year. Remember that any specific tax questions or issues should be directed to a tax advisor. Form 1040-NR: www.irs.gov/pub/irs-pdf/f1040nr.pdf Q. How can my Au Pair get a social security card? The term «Au Pair» refers to an international student who has been admitted to the United States under a student exchange program administered by the U.S. Department of State. An Au Pair will enter the United States on a J-1 visa and is generally not allowed to stay in the United States for more than 12 to 24 months. Au Pairs are usually students who participate in the program and seek the specified educational and cultural experiences of the program. For more information about taxes for au pairs, visit the IRS website at www.irs.gov or www.irs.gov/individuals/international-taxpayers/au-pairs or call 1-800-829-1040. In 1994, the U.S. Department of Labor determined that the au pair scholarship represents a «salary» because there is an employer-employee relationship between the au pair and his or her host family.

The salary of an au pair nanny is usually not subject to social security and health insurance taxes, as the au pair has the status of non-immigrant J-1 and the status of non-resident foreigner. Similarly, the Au Pair`s salary is not subject to FUTA and state unemployment tax. Au Pairs are subject to income tax on their Au Pair scholarship. With the current scholarship rate of $195.75* per week, it is likely that the Au Pair will have an income tax obligation on their U.S. personal income tax return, as non-resident foreigners will not be able to claim the standard deduction or stimulus plan credits. Most au pairs are non-resident foreigners and, therefore, their host families would be exempt from paying federal unemployment taxes on their au pair salary. However, an Au Pair who has previously been to the United States as a student, teacher, intern, or researcher with F, J, M, or Q statuses could be a resident alien during their current stay in the United States. In this situation, the host family would be forced to pay the federal unemployment rate if the au pair`s salary has reached or exceeded a certain threshold in dollars during a calendar quarter or the previous calendar year. This specific dollar threshold and the maximum annual amount of wages subject to FUTA tax can be found in the federal unemployment tax in Publication 926, Household Employer Tax Guide. Almost all Au Pairs can use Form 1040NR-EZ to file their tax returns, instructions for which can be found on the IRS website: www.irs.gov/pub/irs-pdf/i1040nre.pdf The Au Pair`s salaries are exempt from Social Security and Health Insurance (FICA) taxes due to the Au Pair`s status as a non-resident foreigner.

Reimbursement of Care Programs: If your family needed child care to work or look for a job, scholarships paid to your au pairs, the cost of accommodation and food, and program fees paid to AuPairCare may be considered expenses for caregivers in need of care under employers` dependent care reimbursement programs. Your employer is your best resource for specific advice on the subject. Q. Is the weekly scholarship awarded to the Au Pair(s) taxable and is a withholding tax required at the federal level? Does my family have to issue a W-2 form to our Au Pair? The host family would also use Appendix H of Form 1040 to declare and pay any FUTA liability that may arise from the Au Pair`s salary. Since the maximum tax payable for most Au Pairs is less than $1,000, the Au Pair does not have to make estimated quarterly payments. Federal withholding is not required unless the Au Pair asks the host family to withhold federal income tax and the host family consents. 3. Do I have to pay tax? It is important to understand that tax regulations for 2018 have changed based on the Tax Reductions and Employment Act. The biggest change is that there is no longer a federal exemption for non-resident aliens, which means that every dollar earned by a non-resident alien is subject to federal income tax. «Au Pair» is a French expression meaning «at eye level» or «at eye level» [level] and is used to describe someone temporarily joining someone else`s house.

In the United States, the term has a narrow and technical meaning that describes a class of exchange visitors who come to the United States under the auspices of a program originally administered by the United States Information Agency (USIA) and, more recently, by the State Department`s Bureau of Educational and Cultural Affairs (ECA). At any given time, there are approximately 12,000 Au Pairs in the United States. An Au Pair will always enter the United States on a J-1 visa and is not allowed to stay in the United States for more than one year. An Au Pair must be between the ages of 18 and 26. These are usually students who participate in the program in the United States for the educational and cultural experiences it offers them. R. Au Pair in America believes this is the case; However, a host family is advised to check their particular situation with their tax advisor. To claim the tax credit for children and dependents for weekly payments to the Au Pair, the host family must provide the Au Pair`s social security number.

In case of discrepancy with the information, the social security office can refuse the Au Pair a social security card and require manual verification of the data, which would take longer. If the Social Security office says it cannot issue a Social Security card and returns the application and documents, please call Fiorella Ciralli at Au Pair in America, (800) 928-7247, ext. 5087, or email apiacompliance@aifs.com for assistance. 3. Do I have to issue a W-2 form to our Au Pair? Because the au pair scholarship is paid for home service in a private household, scholarship payments are not subject to mandatory income tax withholding and U.S. income tax reporting, according to the IRS. However, au pairs ask you to withhold their income taxes from their salaries and provide a W-2, as this makes the required return to the IRS at the end of the year much less burdensome. The following information applies to most, but not all, Au Pairs, as most Au Pairs are considered «non-resident foreigners». However, if an Au Pair has ever been in the United States as a student, teacher, intern, or researcher in F, J, M, or Q nonimmigrant status before becoming an Au Pair, the IRS has different rules for its taxes and the host family and the Au Pair should consult a tax advisor. One. Your Au Pair can apply to your local social security office for a «Work only with a DHS permit» social security card. The purpose of this card is to authorize participation in the program in accordance with the provisions of the Au Pair Regulations.

Your Au Pair can apply for their Social Security card four days after arriving in the United States. 2. Check out our tax resource for professional au pairs. Apex PROaupair has partnered with Sprintax, an easy-to-use online tool for preparing your tax return. When you create an account with Sprintax, you can easily create fully compliant federal and state tax returns online. As a care professional at Apex, you get a $10 discount on treatment fees. Enter the code SpTx2019AUP301F10 in the discount code field on the checkout page at the end of the process. 4. Is the weekly bursary an eligible child care expense for the foster family? Yes, it is generally considered qualified.

However, host families are advised to check their particular situation with their tax advisor. In order to claim the tax credit for children and dependents for the Au Pair scholarship, the host family must provide the Au Pair`s social security number. Apex PROaupair recommends that you collect your Au Pair`s social security information immediately after receipt and keep it for your records, as Apex PROaupair is not the Au Pair`s employer and we do not collect this information. There are very rare circumstances in which an Au Pair is considered a resident foreigner and is subject to social security and health insurance taxes. If this is the case, the host family is subject to the same tax and reporting obligations as those of an employer nanny. (Updated February 2021) EurAupairs Federal Tax Number: 33-0316910 To reduce your tax liability when filing, the IRS allows Au Pairs to pay taxes in quarterly installments. To do this, simply send Form 1040NR-ES (Estimated Tax Return) to the IRS quarterly and attach a check for the amount you paid. You can also pay your tax in full at the end of the tax year with your 1040NR. EurAupair is pleased to provide host families with a summary of the program and other payments received during a tax year. We will provide you with letters indicating either the total amount paid in a given calendar year or the amount paid in a particular calendar year with the dates of the respective full au pair service period. .