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Au Pair Taxes (How To)

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TitleAu Pair Taxes (How To)
SummaryInformation about Au Pair's requirement to file and pay nonresident federal and state taxes, what to do, and who can help.
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Au Pair Taxes
(for the 2021 Tax Season)



 
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Don't risk your American future
If you were physically in the U.S. in J status anytime between January 1 - December 31, 2021 you're obligated to send at least one form, Form 8843, to the U.S. tax agency IRS (Internal Revenue Service), even if you had no income.  Au Pairs are required by law to file federal and state individual, nonresident tax returns and, in most situations, pay taxes for the stipend (wages) earnings during a calendar year.  Depending on the individual circumstances, you may also need to file a state tax return(s).  Taxes are required for all Au Pairs in the U.S. and failure to pay taxes may having the following negative consequences:
  • Risks to future visa applications for future travel back to the U.S.
  • Risks in applying for a different U.S. visa type
  • Risks in applying for green card or citizenship status
  • Fines or penalties 
Filing taxes can be complex and even U.S. citizens struggle to understand taxes, but taxes are required for your program participation and are part of the American cultural experience.  Taxes support the national and state services you use during your time in the U.S. 



How Au Pair Taxes in America Work
Income taxes occur on the federal (nationwide) level and at the state level to support federal and state services and facilities respectively.  The IRS (Internal Revenue Service) is the federal government agency responsible for collecting federal taxes.  Although Au Pairs are defined as a family member for the cultural exchange program, the IRS considers Au Pairs to be an “employee” of the Host Family and the stipend is classified as "wages".  Therefore, the IRS determines stipend earnings as subject to income taxes.  

“Tax season” runs from January 1 to April 15 every year.  During this time everyone in America reconciles their taxes owed to the federal and state governments based on earnings from the previous calendar year.  Taxes are always due by April 15th (unless April 15th falls on a weekend or a government holiday).  Au Pairs typically owe money to the federal government for income tax (about 10-12% of what was earned) because taxes are not withheld from stipend payments as part of the Au Pair program.  
 
2021 Tax Season Deadline
April 18, 2022

Au Pairs who have lived in the U.S. for more than 2 years (including previous visa programs and COVID exceptional extensions) should take the free Substantial Presence Test to determine residency status for tax purposes and may file taxes differently than other Au Pairs.  Most Au Pairs are considered non-residents for tax purposes ad filing taxes as a resident or a nonresident is a huge difference.  Be sure you understand which is appropriate for you (Sprintax can help!).  If the Substantial Presence Test results in filing taxes as a resident, Sprintax refers Au Pairs to TurboTax for next steps.

In addition to federal taxes Au Pairs may owe state income taxes.  The amount of state taxes depends on the state where you lived and “worked” and could be nothing.  Click here to learn more for your state.

Because Au Pairs live in the home with Host Families they are not subject to tax withholding reported on Form 941 and W-2.  Nor are Au Pairs subject to Social Security or Medicare (FICA) taxes.  As nonresidents, Au Pairs are not eligible for Earned Income Tax Credit, the Hope Credit or the Lifetime Learning Credit.

Learn more about Au Pair Taxes from our recommended tax professionals, Sprintax.



The Basic Tax Process
Step 1: Gather documentation.  You need: 
  • Passport
  • Visa / Immigration information including Form DS-2019
  • Social security number.  If you do not have a social security number you can apply for one with the Social Security Administration.
  • Evidence of stipend payments
  • U.S. entry and exit dates for current and past visits to the U.S. (reference passport stamps and I-94 travel history)
Step 2: Calculate stipend payments ("wages") for the tax year using the following:
  • Completed Hours, Stipend, Vacation & Education Log
  • Bank account statements
  • Calculate how much earned based on weeks in the U.S.
  • Preserve your logs and documents on stipend, you will need them if you are ever audited by the IRS
Step 3: File Form 8843
  • Completing the form should take about 5 minutes and is required for every J-1 visa holder regardless of earned income, filing a tax return and/or owing money in taxes. 
  • Learn more about Form 8843 from Sprintax
  • Sprintax will generate a completed Form 8843 for you if you user their services.
Step 4: File Form 1040NR with the IRS.  
  • You can file electronically (e-File), or
  • Through the mail (don't forget to sign your form and send certified mail with a tracking number)
  • (we recommend working with Sprintax!)
Step 5: Send payment to the IRS.  
  • You can pay electronically with a debit or credit card when you e-File, or
  • Through the mail by sending a check.
Step 6: File and pay (if required) your State Income Taxes. 
  • This process varies by state and for every state an Au Pair lived in (i.e. transitions, extension-transfers, Host Family moving). 
  • Sprintax can inform you if you need to complete a state tax return
  • State forms are typically printed, signed and mailed and include check payment, if applicable.



Who Can Help You
You are ultimately responsible for paying your own taxes.  Taxes are important and complex and many Americans work with tax professionals to file and pay federal and state taxes.  Go Au Pair strongly encourages you to work with a licensed tax professional such as Sprintax to e-File your federal taxes and receive assistance with your state tax return.  Sprintax charges a small fee for their federal and state tax services.

Join an informative Sprintax Webinar to learn more:
  • An Introduction to J-1 Nonresident Tax in the USA Tuesday February 1st @ 1pm EST (eastern timezone) – Register here 
  • J-1 Au Pair Tax Obligations Wednesday, February 2nd @ 11am EST (eastern timezone) - Register here
  • An Introduction to J-1 Nonresident Tax in the USA Monday March 21st @ 12pm EST (eastern timezone) – Register here 

Sprintax also assists with corrections to previous tax forms and reconciliations on unpaid taxes up to three years. 
 
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Get started with Sprintax!
Receive a $5 discount off Federal tax returns when you use promo code:
21GAP250F5

Be aware of tax scams and fraudulent tax companies!  Only work with reputable companies or a licensed accountant if you pay for tax services.  Sprintax is a safe and reliable tax professional.  They participate in Alliance, WETM-IAC and IAPA J-1 conferences and Go Au Pair staff have personally met with Sprintax representatives.

Go Au Pair is not licensed to provide official tax advice.   Any information or comments contained in this article are merely suggestions or recommended topics to discuss with a professional Tax Advisor or IRS.  As tax laws are continually being amended, and are sometimes too complex for non-tax professional persons to instruct on, we encourage Host Families and Au Pairs to consult a tax professional, such as Sprintax, or directly contact the IRS for definitive answers regarding your specific situation.

 
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