HOST FAMILY AND AU PAIR TAXES ARE SEPARATE

Keep in mind that host family taxes and au pair taxes are separate. The only thing that’s the same for both of you is the due date: July 15th, 2020. (Well, and that you both are dealing with the IRS.)

Everything else about the au pair’s taxes and the host family’s taxes are completely separate.

Separate forms. Submitted separately.

And no penalty to either person if the other person doesn’t file or files incorrectly.

TAXES FOR AU PAIRS

Let’s start with taxes for your au pair. Hopefully your au pair has been saving $20 per week (or about 10% of their stipend). If not, they may have some catching up to do.

Keep in mind that the US tax system is unlike any other in the world and the directions are complicated (and not in your au pair’s primary language). We strongly suggest you help your au pair along the way. This is a great way to build rapport and maybe earn some brownie points in case you get stuck in traffic on your way home from work next week.

Au Pair Tax Checklist

Here’s what your au pair will need to do her or his taxes:

• Form 1040-NR-EZ See the IRS info page, including the form itself (updated for tax year 2019) and and the instructions (still says tax year 2018).
• A social security number (here’s our article with tips to get your au pair’s social security number).
• Remember that she or he is on a J-type visa.
• Year-end bank statement showing any interest earned.
• The number of days they were in the US (Use this handy calculation link from timeanddate.com). The day starts the day they arrive in the US, not at your house.
• Receipt for wages from the host family (See our Downloads page)
• How they will be paying their tax.

IRS Form 1040-NR-EZ for Non-Resident Aliens

This form is not available to my knowledge in tax software such as TurboTax, Quicken, etc. so you’ll have to go to the IRS website (links above and below) and fill it out, or find an online company that specializes in foreign exchange student and expatriate taxes.

If you want a company to help you with your taxes, here are two options: Sprintax and Taxback.com. Abbie’s agency last year, Au Pair Care, suggested them in a notice to parents. If you know of any others, please let us know!

Here are some helpful resources right from the IRS about au pairs and the 1040NR form:

• IRS Form 1040NR-EZ (downloadable PDF from the IRS you can fill out)
• IRS Instructions for 1040NR-EZ (downloadable PDF instructions from the IRS for filling out the 1040NR-EZ)
• IRS information about Au Pairs
• Phone number for the IRS: 1-800-829-1040 within the US or +1 267-941-1000 outside of the US.

Sample Au Pair 1040-NR-EZ

Free download for one possible way to fill out an au pair’s 1040-NR-EZ.

DISCLAIMER: Please consult your tax advisor or the IRS for definitive answers about your personal tax situation and your au pair’s taxes. General tax information provided in this article does not constitute tax advice.

See our downloads page for a list of all the My Au Pair and Me documents.

Some Basic Au Pair Assumptions

Here are some of the assumptions we’re making for this article from reading the 1040NR-EZ instructions.

Your au pair:

• Is single.
• Is not claimed as a dependent, and has no dependents.
• Has less than $100,000 in earnings.
  • $10,179 = the weekly stipend salary of $195.75 x 52 weeks (for au pairs who extended into their second year).
• May have some interest from checking or savings account.
• The only deductions are state and local income taxes.

Definitely consult a professional tax professional if your au pair was previously in the United States as a student, teacher, trainee, or researcher on an F, J, M, or Q visa. That might change their status and they might be subject to social security or Medicare taxes.

Calculating Taxes

Following our assumptions, let’s take the path that our example au pair, a woman, is considered a non-resident alien with pretty simple finances, and will fill out Form 1040NR-EZ.

She arrived in the United States for training on Monday, August 26th, 2019. She joined our family on Friday, August 30th and receives $200/per week stipend.

Using the date calculator, I can see she’s been here 128 days (remember to include the end date).  And if I scroll down on the website, it’s easy to count the weeks and calculate how much I paid her (14 weeks x $200/week = $2,800)

The tax table starts on the IRS 1040NR Instructions Page 22. By finding her pay, I can then see how much taxes she owes. If the payment is on the split between two rows, use the bottom row. See the red box in the screenshot below.

This au pair owes $281.

Paying Taxes

Once the tax forms are complete, your au pair will probably have to pay taxes. The IRS 1040NR Instructions Page 11 has information on all of the ways you can pay: online, phone, app, check, or money order.

Online Payment

If you pay online, either use the IRS2GO app or start at https://www.irs.gov/payments.

• Direct deposit is only available with a bank checking account. You must have filed taxes last year for them to confirm your identity.
• Payment by debit card or credit card is available for a fee.

After you’ve paid online, you still need to mail your 1040NR-EZ. Put your signed 1040NR-EZ form in a stamped envelope and send it to this address:

Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0215

Payment with Check

If you are sending a check or money order, put it and your 1040NR-EZ together in one envelope (remember to sign it!), and send it to this address instead:

Internal Revenue Service
P.O. Box 1303
Charlotte, NC 28201-1303

TAXES FOR THE HOST FAMILY

Did we already say the advice here is no substitute for the advice from a tax professional? We did? Good. 

Now let’s dive into the tax considerations for au pair host families. Remember that the advice here is no substitute for advice from a tax professional.

If you need specific support, please consult your tax advisor or the IRS for definitive answers about your personal tax situation.

Can host families deduct the cost of their au pair?

If the stars align just perfectly, the stipend you paid to your au pair, the costs of room and board, and the fees you paid to the au pair sponsor agency are all eligible expenses under federal tax programs.

There are two potential federal tax programs that you may be eligible for if an au pair is providing child care services in order for you to work or to look for work.

1. The Child and Dependent Care Tax Credit can be claimed when you file your taxes.
2. Also, some employers offer dependent care reimbursement programs called a Dependent Care Flex-Spending Account (FSA) through pre-tax payroll deduction.

You will also need to meet the other qualifications to receive these tax deductions such as dependent qualifications and income limits.

These deductions are typically in tax software such as TurboTax, Quicken, etc. If you need help I still suggest that you consult your tax advisor or the IRS for definitive answers about your personal tax situation.

Some families (especially in Massachusetts) may also need to change their tax situations to include au pairs as household employees. Here’s the IRS link to Hiring Household Employees and Publication 926, Household Employer’s Tax Guide.

Au Pair Time Sheet (Time Card) and Payment Receipts

Download the Free Au Pair Time Sheet PDF to keep track of your au pair’s hours worked. Also, document when and how much your au pair was paid.

See our downloads page for a list of all the My Au Pair and Me documents.

Host Family Tax Checklist (not household employers)

Whether you’re using a tax professional or doing your own taxes (you go!), then here’s what you’ll need.

Must have to file:

• Social Security number for your au pair.
• Receipt for stipend payments to your au pair. (See our downloads page)
• Receipt for payments to the agency. (See your agency portal page.)
• Tax identification number for your agency (should be on your agency payment receipt).

Should have on hand in case you’re audited (but not required to file):

• I-9 Form (Employment Eligibility Form): fillable PDF or paper version, and instructions.
• For page 2 List A, it’s common to use Receipt Foreign Passport, work-authorized non-immigrant, then Form I-94, then Form DS-2019 as shown below in the partially-filled out form. If you look on List A in the instructions, it says, “For a nonimmigrant alien authorized to work for a specific employer because of his or her status, a foreign passport with Form I/94/I-94A that contains an endorsement of the alien’s nonimmigrant status.”
• Use your own judgment and tax professional advice.

Options for Form I-9 Employment Eligibility List A

Do I Withhold My Au Pair’s Taxes?

Host families are NOT required to withhold the au pair’s taxes. However, they can on behalf of the au pair IF the au pair asks AND the host family agrees.

WHAT IF I DON’T HAVE A TAX PROFESSIONAL?

So, if you don’t have a tax professional and you still want some help, we always recommend speaking with your local area coordinator.

You can comment below, and we welcome questions and just general venting in the My Au Pair and Me Community Facebook group. (The standard “we are not tax professionals” disclaimer stands for the Facebook group, but sometimes it’s just nice to vent.)

You can always contact the source. The phone number for the IRS is 1-800-829-1040 within the US or 267-941-1000 outside of the US.

Regardless, we wish you the BEST OF LUCK!!!!