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The tax information contained on this website is not meant to be exhaustive and is not meant to be tax advice. We are providing introductory information for U.S. income tax requirements of au pairs working in the US on J-1 visas. If you have any questions about your tax obligation you should speak with a professional tax advisor or Certified Public Accountant. Please note that Apex PROaupair, our staff, and Area Directors are not able to provide any additional guidance or tax advice.
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Apex PROaupair encourages you to visit the Au Pair page of the IRS website for the most detailed information:
http://www.irs.gov/Individuals/International-Taxpayers/Au-Pairs
Here are a few Frequently Asked Questions about Taxes
1. Is withholding of Social Security tax required on the weekly stipend paid to my au pair? No. According to the Internal Revenue Code, "Services performed by a non-resident-alien while temporarily in the United States as a non-resident under subparagraph (J) of Section 101(a)(15) of the Immigration and Nationality Act are excluded from coverage under the Social Security Program if the services are performed to carry out the purpose for which the non-resident alien was admitted to the United States."
2. Are the weekly stipend payments paid to my au pair taxable and is Federal withholding required? According to the IRS, while the weekly stipend paid to the au pair is not subject to Social Security and Medicare taxes, it is taxable to the au pair as wages. Federal withholding is not required unless the "employee" (Au Pair) asks the "employer" (Host Family) to withhold Federal income tax and the "employer" agrees to do so. Any withholding action must be mutually agreed to.
* Note: The Tax Cuts and Jobs Act of 2017 changed the tax code for non-resident aliens, no longer allowing them to take the standard deduction when filing their income tax return – resulting in a significant increase in the amount of tax they are likely to owe when they file their 1040-NR EZ. For this reason, some au pairs may prefer to have income taxes withheld each paycheck in order to avoid a large tax bill at the end of the year.
3. Do I need to issue a W-2 form to our au pair? According to the IRS, because au pair stipend is paid for domestic service in a private home, stipend payments are not subject to mandatory U.S. income tax withholding and reporting. However, au pairs my request that you withhold their income taxes from their wages and provide a W-2 because it makes their required filing with the IRS at the end of the year much less of a burden.
4. Does the weekly stipend represent a qualifying childcare expense to the host family? Yes, it is generally considered to qualify. However, host families are advised to verify their particular situation with their tax advisor. To claim the Child and Dependent Care Tax Credit for the au pair stipend, the host family will need to provide the au pair’s social security number. Apex PROaupair recommends you collect your au pair’s Social Security information immediately upon receipt and maintain it for your records, since Apex PROaupair is not the au pair’s employer and we do not collect this information.
5. Does the program fee paid by the host family to PROaupair qualify as a child-care expense? Apex PROaupair refers host families discuss this issue with their tax advisor and obtain an opinion. Federal law prohibits Apex PROaupair from giving any tax filing advice. According to IRS Publication 503, "fees you paid to an agency to get the services of a care provider, deposits you paid to an agency or preschool, application fees, and other indirect expenses are work related expenses if you have to pay them to get care, even though they aren't directly for care."
6. What is Apex PROaupair’s tax ID number? Apex PROaupair’s Federal Tax ID number is 51-0677755
7. Is Schedule H (Form 1040) required to be filed by the host family? According to the IRS, Schedule H is required for reporting wages of $2,200 or more paid to a domestic worker. However, families are only required to file the form if they withheld income taxes or paid wages that are subject to Social Security Taxes, Medicare Taxes or Federal Unemployment Taxes. Since payments to the au pair are not considered wages for the purpose of Social Security Taxes, Medicare Taxes or Federal Unemployment Taxes, you are not required to fill out the Schedule H if you do not withhold income taxes from your au pair’s wages.
8. Am I required to purchase Workers’ Compensation insurance for my au pair? Due to the fact that an employee-employer relationship exists between host families and au pairs, you are responsible for determining whether Workers’ Compensation insurance, or any other insurance, is mandatory under federal, state and/or local laws and providing any such mandatory insurance. To review the requirements in your state, click here.
9. How does my professional au pair file a tax return? Apex PROaupair provides helpful resources for au pairs about how to take care of filing their taxes. Visit our Au Pair Tax Resource page.
