Hooray, It’s Tax Season!
“Hooray” is probably the last word that goes through your mind when tax season begins. No one really likes taxes (unless you’re getting a sizeable return).
As a Host Family, filing is difficult enough without having to understand the ins and outs of Au Pair taxes. You may be wondering, “Is any aspect of Au Pair cost tax deductible?” And if so, to what extent?
When you’re an Au Pair in America tax season might be a new thing. Not only do you have to file taxes in a new country, but this might be the first time you’ve ever had to file your own.
Au Pair Taxes 2019- Commonly Asked Questions
Here, we will address some common questions about Au Pair taxes, and what families and Au Pairs need to know.*
Can Host Families claim Au Pairs as dependents?
No. Though it is possible to claim an adult non-relative as a dependent on your taxes, under the Credit for Other Dependents, only U.S. citizens and resident aliens qualify. Because Au Pairs come to the U.S. as exchange visitors on the J-1 Visa, they are considered non-resident aliens, and thus would not qualify for this tax credit.
Instead, most Host Families find that they can claim Child and Dependent Care tax credit for Au Pair Childcare. Applications must include personal information about your Au Pair, including Social Security number (SSN) and other information.
Sometimes, Au Pairs feel weird about giving out their SSN. If your Au Pair shows hesitancy, you can invite them to call our office at 1.888.AUPAIR.1 to confirm the necessity of your request.
Can I deduct expenses for things I’ve provided to my Au Pair?
If you’ve considered deducting your Au Pair’s portion of food, housing, phone bill, transportation, or other expenses, you’re not alone. Many families want to know what allowances exist childcare-related expenses under the Child and Dependent Care Tax Credit.
You may be able to claim:
- Fees paid to Go Au Pair.
- Stipend paid to your Au Pair.
- Au Pair transporting children during on-duty hours.
To be able to claim the credit, the Host Family must meet several tests described in Publication 503.
Many families also ask their tax advisor whether meals and lodging provided for your Au Pair. Consult a tax professional to ensure you file accurately and legally.
Are any other Au Pair costs tax deductible?
Other Au Pair-related costs, such as paying for vacation airfare, would likely only qualify if you can justify them as business expenses. Go Au Pair recommends working with an expert on Au Pair taxes to determine what might be considered an allowable deduction.
If you Google “tax Au Pair USA expert,” you’ll see results from TurboTax and Tax Tiger, which won’t necessarily lead you to Au Pair program specialists. Thus, to minimize your research efforts, Go Au Pair partners with Au Pair tax experts at H&R Block, who have extensive experience with Au Pair tax requirements.
Do Au Pairs need to file taxes?
Yes. The Internal Revenue Service (IRS) does tax Au Pair participants. Per the IRS Au Pair webpage, “au pair wages are includible in the gross income of the recipients, and au pairs are required to file U.S. individual income tax returns.”
If you’ve been a longtime Host Family, you may remember a time when Au Pairs didn’t have to pay such high income tax. This changed for the 2018 tax season, when the taxable wage threshold was lowered. Go Au Pair has notified all Au Pairs who entered the country in 2019 that they will be subject to paying income tax.
For anyone who’s an Au Pair in America taxes are important. Not filing a tax return or paying taxes owed can impact your ability to get a U.S. visa in the future.
More Info on Taxes Au Pair Host Families Should Know
How does tax season affect Host Families?
In addition to understanding how to claim the Child and Dependent Care Credit on your taxes, as a Host Family you’ll want to understand what your Au Pair needs to know during tax season, too.
Filing taxes is also an integral part of U.S. culture, and your Au Pair may want some guidance on how to navigate tax season.
Helping your Au Pair with taxes.
Au Pairs are required to file individual tax returns for Federal taxes (and possibly state taxes, depending on where you live). Because Au Pairs are new to American culture, they may need your help understanding tax requirements and how to file and pay taxes.
Are Au Pair program expenses eligible for Dependent Care Reimbursement Programs (Flex Spending Accounts or FSAs)?
Your company’s FSAs are usually identical or similar to those from the IRS Child and Dependent Care Tax Credit. You will need to determine the exact rules for your FSA. (Expenses paid for using your FSA funds are likely ineligible for the IRS Child and Dependent Care Tax Credit).
What is Go Au Pair’s Federal Tax Identification Number?
If you are a current Host Family with Go Au Pair and need our federal tax ID to file this year’s tax return, please click here. (Once you log in, you’ll be redirected to an article with more information).
*Go Au Pair is not licensed to provide official tax advice. The information in this article are suggestions and basic recommended topics to discuss with a professional Tax Advisor or IRS. Tax laws change often and are sometimes too complex for non-tax professionals to interperet. Thus, we recommend that Host Families and Au Pairs to consult a tax professional. Or, directly contact the IRS for definitive answers pertinent to your specific situation.