I talked to an au pair this week who was worried about her taxes.  “I know we have to submit something by April 15th, but I am not sure what to do!”, wrote Lucia.  “Do you have advice for me?” 

Not to worry – taxes sound scary to an au pair, but are nothing to get stressed about.  Forms and tips are provided by AuPairCare and can be found in Au Pair Room for your use.  Au pairs and host families also received tax information from their Area Director this spring.  Most au pairs find it an easy and painless process.

What is important for all au pairs to know is that everyone should file a tax return.  The instructions are simple and come with the tax form.   You can find the details on filing here, however I think it is important to stress again that those who do not pay taxes can encounter difficulties if they plan to return to the United States, even on a tourist visa.  To be safe, take a few minutes to file your return by the April 15th deadline – this way, you can enjoy your summer worry-free!

As many of you well know, the au pair program is a true gift for many - the chance to leave your child(ren) in the care of a wonderful young woman who spends her days sharing her culture and language while helping them to learn and grow. Many of you have probably also found that this gift is more affordable than you expected, and more convenient for your family.

Unfortunately, this gift is up against something serious, and I believe it's important for host families to understand. As you read this, Congress is considering passing legislation that would impose a 7.65% FICA tax burden on au pairs AND host families. That's right, both parties would be taxed. For host families, this mean increasing the costs of this affordable option and adding even more taxes to working American families.

Even more unfair is the implication of this tax on our au pairs. Since they return to their home country after their program ends, au pairs do not have the opportunity to take advantage of Social Security and Medicaid, which these taxes fund. Imposing these taxes on au pairs for something they will not benefit from seems wrong, especially in light of the fact that they do already file a federal tax return and often do owe some money on their earnings.

Today I want to encourage all host families to review this legislation and to make your voice heard. The Alliance for International Education and Cultural Exchange, an association of many US cultural exchange organizations, has drafted an opposition letter for host famiiles to sign and send to their Senators and Representatives. Click here to send your letter today!

It's that time of year again......the sun begins to shine, the birds begin to sing, and Uncle Sam requests your taxes!  For au pairs, taxes can be a scary and daunting task, so here are a few updated tips so you can get started.
 
State Taxes
It's important to note that your au pair will be responsible for paying both state and federal taxes. Guidelines vary from state to state, so be sure you know the right form and other pertinient information for your state.  A CPA can help you decide which form(s) you'll need to submit
 
Federal Taxes
Au pairs are required to file taxes, though the amount they owe will vary depending upon how long they worked in a calendar year. AuPairCare recommends that au pairs speak with a CPA who specializes in non-resident taxation so that they can get the best advice for their situation.  For Federal Taxes, AuPairCare recommends that au pairs set aside 1-2 weeks salary to be sure they have enough money to pay taxes, though again, the amount owed will depend upon how long an au pair worked in a given year and other variables.
 
It's also important to note that even au pairs who have returned to their home country need to pay their taxes. Not paying taxes can cause problems in returning to the US for vacation or education. Those who have not paid may be responsible for fines or not be allowed to return to the US. Encourage your au pair to take care of her taxes right away.

Au pairs and host families can find tips and documents related to taxes in Au Pair Room and Family Room  Your Area Director is also an excellent resource for basic information. Most importantly, don't let paying taxes scare your au pair - help her file early and properly.

Every Au Pair Orientation I get a surprised reaction from host families and au pairs when I mention they both need to file a tax return.  Below is some helpful information from Au Pair Care's tax pamphlet.  Please ask your Area Director if you need more details.  Always check with your tax advisor too as Au Pair Care and your Area Director are not licensed to provide professional tax advice.

1.) Your Taxpayer Identification Numbers are your au pair's social security number and Au Pair Care's Federal Tax ID number (your Area Director can provide you with this number).  This means your au pair needs to get the social security card asap.

2.) Host Families are eligible to claim the au pair's stipend, cost of room and board, and program fees under the Child and Dependent Care Tax Credit (certain rules apply).

3.) Host Families can claim the credit by filing: Form 1040, Form 1040A, or Form 1040-T.

4.) Host Families are NOT required to withhold taxes unless your au pair requests this and the host family agrees.

5.) The au pair is repsonsible for declaring her own income.  You can use the "Stipend Payment Receipt" given to you at your Au Pair Orientation or you can create your own.

6.) Au Pair Care will provide customized invoicing and payment documentation upon request.  Check with your Area Director.

7.) An au pair should file using Form 1040NR-EZ (non-resident) or Form 1040 NR.  These forms are simple and self-explanatory. 

8.) Au Pairs who are in the country less than 4 months most likely will not owe taxes.  For au pairs who do owe taxes, it is usually about $200.-$400.  Save money from your stipend in advance at a local bank account.  This is the au pair's responsibility to pay, not the host family's.  An au pair should still file even if they do not owe money.

9.) Au pairs are not eligible for the: Earned Income Tax Credit, the Hope Credit, or the Lifetime Learning Credit.  An au pair is not a student but here on a J-1 au pair visa.

10.) Au pairs who need to return home prior to the April 15, tax deadline may submit their tax returns early.  Au pairs who do not submit a tax return may have difficulty extending or obtaining future visas.

Please consult the Internal Revenue Service at: www.irs.ustreas.gov or call them at: 1-800-829-1040.