Tax Day is on April 15th, 2019. AuPairCare is already getting lots of questions from host families and au pairs on how to report au pair income and au pair tax deductions. So we aggregated some of the most requested information for your easy reference. While we are experts in live-in childcare, we're not tax experts, so it's always best to consult a tax professional. For current families and au pairs, log into Family Room or Au Pair Room and search "taxes".
Your best resource for information on au pair taxes is, of course, the IRS. Visit their site for detailed definitions and information about au pair related filings. If there is something you don’t understand reach out to the IRS directly either on the IRS website or by phone, 1-800-829-1040 within the US or 267-941-1000 outside of the US. The federal tax ID number in reference to program fees paid to AuPairCare is 94-2919816
The information below applies to most, but not all au pairs, because most au pairs are considered “non-resident aliens.” If, however an au pair had previously been in the U.S. as a student, teacher, trainee, or researcher in F, J, M, or Q nonimmigrant status before they become an au pair, the IRS has different rules for their taxes and both the host family and au pair should consult a tax advisor.
Your au pair is responsible for declaring their own income, submitting a tax return and paying taxes. Further, host families are not required to withhold taxes unless the au pair (employee) requests that taxes be withheld and the host family (employer) then agrees to do so. Host families usually do not need to pay federal unemployment tax for their au pairs but for more information please refer to the IRS website.
Child and Dependent Care Tax Credit: To find out if you can claim the child and dependent care credit, the IRS offers a tax assistant that will help you determine your eligibility. Visit the “For Au Pairs” section below for information on obtaining a social security number for an au pair.
Dependent Care Reimbursement Programs: If your family needed child care to work or look for employment, then the stipends paid to your au pairs, the costs of room and board and the program fees paid to AuPairCare may qualify as a dependent care provider expense under employers’ Dependent Care Reimbursement programs. Your employer is your best resource for specific guidance on this issue.
1-9 Form: As a host family, you are expected to complete Form I-9 to report the host family-au pair relationship and prove the au pair is authorized to work for the host family as part of the au pair program (in association with the J-1 cultural exchange visa). Host families should complete the form according to instructions for Exchange Visitors. For au pairs, the “acceptable documents” are in List A, #5. You do not need to file this form with any government body, but should retain the I-9 form in your records.
The IRS considers an au pair to be an “employee” of the host family so au pairs are required to file U.S. individual income tax returns. Au pairs need a record of their au pair income (stipends) received from their host family to file. If you are a current AuPairCare au pair, log in to Au Pair Room and search for the tax guide, as it will include the Stipend Payment Receipt template.
For instructions on applying for a Social Security Number for J-1 Visa holders, visit the Social Security Administration's site: http://www.ssa.gov/pubs/10181.html
Nearly all au pairs can use Form 1040NR-EZ to file their returns, the instructions for which can be found on the IRS website: https://www.irs.gov/pub/irs-pdf/i1040nre.pdf
Credits: According to the IRS, Au pairs are not really "students" in the United States, and therefore are not eligible to exclude their au pair wages from gross income under the student article of any U.S. income tax treaty. Au pairs are not eligible for the Earned Income Tax Credit, the Hope Credit, or the Lifetime Learning Credit.
Don’t forget if you are a current AuPairCare host family or au pair, you can reach out to your local Area Director for things like social security letters. For more technical questions, reach out to your tax professional. Happy filing!