Tax Information for Au Pair Host Families

While Au Pair USA is not licensed to provide official tax advice, and therefore cannot counsel host families or au pairs in regard to program fee and wage inquiries, we would like to provide you with some resources. As tax laws vary from state to state, host families and au pairs are encouraged to consult with a local professional tax advisor or directly with the Internal Revenue Service for any specific questions you may have regarding taxation.

Au Pairs are exempt from Social Security and Medicare taxes as holders of a J-1 Exchange Visitor Visa.
Au Pairs are required to pay income tax with the exception of Social Security. However, depending on what time of the year the Au Pair arrives, it is possible that he or she will make below the minimum amount required for taxation in that year.
The weekly stipend is taxable to the Au Pairs as wages. The IRS considers the Au Pair to be a household “employee” and the Host Family to be the “employer.” However, Host Families are not required to withhold taxes unless the Au Pair (employee) requests that taxes be withheld and the Host Family (employer) agrees to do so. The Au Pair is responsible for declaring his, or her, own income and paying taxes at the end of the year. Au pairs will only pay taxes if they make more than $3300 in a calendar year.
Host Family fees paid to InterExchange Au Pair USA and the weekly stipend paid to the Au Pair may qualify as a deductible childcare expense. Again, we recommend that you consult a professional tax advisor for an opinion.
Host Families who wish to take the childcare credit on their Federal Income Tax Return or who wish to take reimbursement from a flexible spending program must ensure that their Au Pair has a Social Security number. Each Au Pair must acquire his or her Social Security number individually and is given a letter at the Au Pair orientation in New York to assist them in obtaining a Social Security number.
An au pair will almost always be a non-resident alien (NR), and will be required to file Form 1040NR or 1040NR-EZ to report hi/her au pair wages. As a non-resident alien, the au pair is ineligible for the Earned Income Tax Credit, the Hope Credit and the Lifetime Learning Credit. An au pair is not really a "student" in the United States, and therefore is not eligible to exclude his/her au pair wages from gross income under the student article of any U.S. income tax treaty.
Most au pairs are non-resident alien, and therefore their host families would be exempt from paying federal unemployment taxes on their au pair wages. However, an au pair who had previously been in the United States as a student, teacher, trainee, or researcher in F, J, M, or Q nonimmigrant status might be considered a resident alien during his/her current stay in the United States. In this situation, the host family would be liable to pay Federal unemployment tax if the au pair's wages during any calendar quarter, or during the preceding calendar year, equaled or exceeded $1,000. The maximum amount of household employee wages subject to FUTA during 2002 and 2003 is $7,000. The host family would also use Schedule H of Form 1040 to report, and pay over any FUTA liability which might arise from the au pair's wages.