A Complete Tax Guide for Au Pairs in the U.S.

Au Pair Taxes Explained by Sprintax

According to the IRS (Internal Revenue Service), there are up to 12,000 au pairs in the US at any stage during the year (source).

We’ve put this handy guide together to fill you in on everything you need to know about foreign au pairs and tax in the US.

About the Au Pair Program

What is an au pair?

An au pair is an individual between the ages of 18 and 26, who travels from their home country to live in the US with a family and work as a caregiver (foreign nanny). An au pair comes to the US as an Exchange Visitor on a J-1 visa and is not allowed to remain in the United States longer than one year.

Working as an au pair is an unrivalled opportunity to experience the American way of life – and for those who are not native English speakers, it’s a chance to learn and practice the language.

You can find more about the au pair program here.

Au pair Income

Au pairs in America receive a cash stipend (tied to the U.S. minimum wage) from the host family. The au pair stipend constitutes “wages” because an employer-employee relationship exists between the au pair and their host family.

Au pairs must report this income to the IRS and it’s subject to income tax.

One of the many challenges that an au pair may face when they arrive in the US is coming to terms with the US tax system.

Do au pairs have to pay taxes?

In short, yes.

All payments that you have received as an au pair from your host family, which cover the cost of any required academic coursework, room and board or compensation for childcare work are subject to income tax.

As nonresidents, au pairs will owe tax on all of the money they earned from US sources.

Although au pair wages are not subject to mandatory U.S. income tax withholding and reporting on form W-2, au pairs must file an income tax return.

Filing an Income Tax Return

You will need to apply for a Social Security Number (SSN) or for an Individual Taxpayer Identification Number (ITIN), whichever is applicable in your case, in order to file your US Federal tax return.

In the United States, besides federal tax, there are also state taxes and local taxes. Whether you need to file a state tax return will depend on the tax rules of the state in which you lived and /or worked, as some states do not require you to pay state tax.

In order to reduce your tax liability during filing, the IRS permits au pairs to pay tax in quarterly instalments. To do this, all you’ll need to do is submit Form 1040NR-ES (estimated tax return) to the IRS on a quarterly basis and enclose a cheque for the amount you are paying. You may also pay your tax in full at the end of the tax year with your 1040NR-EZ.

Prepare your au pair taxes hassle-free with Sprintax

What taxes are au pairs exempt from?

Because au pairs are paid for their work in the setting of a private home, they are not subject to mandatory US income tax withholding and reporting on Form 941 and W-2.

Wages will also be exempt from Social Security and Medicare (FICA) taxes because of the au pair’s status as a nonresident alien. However, if you had previously been in the United States as a student, teacher, trainee, or researcher in F, J, M, or Q non-immigrant status, then you may be classed as a resident alien, meaning you may be subjected to these taxes.

Tax deductions

Most au pairs are considered nonresident aliens for tax purposes, so they are not eligible for the Earned Income Tax Credit, the Hope Credit or the Lifetime Learning Credit.

What happens if an au pair does not pay taxes?

It’s important to note that, by not filing your tax return, you can severely jeopardize your chances of securing a US visa or Green Card in the future.

How to pay taxes

If the case arises where you end up owing additional taxes along with your return, you have various options to pay. The most common forms of paying are pay by check, bank transfer or your credit or debit card.

You may need to prepare a payment voucher and mail it to the IRS with a check or money order if you choose this payment method.

If you choose to pay with a payment voucher, Sprintax will provide the filled out form for you. You will find detailed information about the method you have chosen in your instructions.

Check out this guide on what to do if you missed the tax deadline.

How to file my US tax return as an au pair

Usually, you have until 15 April of every year to file your tax return, however – with the ongoing COVID19 pandemic causing chaos across the globe, the deadline for 2020 has been moved forward to 15 July.

  • In order to file your au pair tax return you need:
    Your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN);
  • Calculate how much you earned in the US during the previous calendar year. The simplest way is to multiply your weekly stipend with the number of weeks you worked as an au pair;
  • File form 1040NR-EZ with the IRS;
  • Send payment to the IRS with the amount of any taxes owed.

At Sprintax, our software has the capabilities to help you prepare your federal tax return easily online. We will also assist you with your state tax return.

By preparing your tax documents with Sprintax, you can also ensure that you receive your maximum tax refund! And with the average Sprintax user receiving a tax refund of $1,153, it’s easy to see why it’s worth your time checking to see what you are owed!

With Sprintax you can:

  • Save time and stress!
  • Determine your residency status
  • Prepare a fully compliant US tax return
  • Maximize your State tax refund if available
  • Avail of our 24/7 Vita Qualified Live Chat facility

Prepare your au pair tax return today!

Hey I'm Stacy! I'm dealing with US taxes and can't wait to help you prepare your tax return! I've been working with taxes for like forever, so you can totally trust my expertise. Sprintax can make things much easier for you. Check out my blog posts and feel free to ask me any questions.

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