Tax filing for au pairs? Yep, we do that too.

The laws of the United States require all individuals to file a tax return and report income earned during the calendar year if you earn income over a filing threshold. If you do not file a tax return timely, you could accrue interest and penalties on already owed tax liability amounts, making your out-of-pocket expense even greater.

Furthermore, not filing returns when required could prevent you from obtaining a visa in the future. If you plan to apply for a U.S. visa in the future, or a change of status, you may be required to pay any unpaid tax, along with interest and penalties before you can obtain the visa. Filing your tax return on time prevents any delay you may experience in obtaining a visa and reduces the overall out-of-pocket amounts you would otherwise have to pay.

The Internal Revenue Service (IRS) considers an au pair an employee of the family hosting them. This means that the total amount of your weekly stipends you receive from your host family(ies) is considered taxable as wages. You will need to file a tax return if you earned any stipend income during 2023.

You may also be required to file a state tax return depending on which state you are residing in during your au pair assignment. Each state has different rules and your tax preparer will determine whether a return is required for taxes you owe in your state. Please refer to the additional references section below for a website link to each state’s income tax website where you can find additional information on state tax regulations.

The federal U.S. tax return reporting stipend income earned during 2023 is required to be filed by April 15th, 2024. This is also the date any taxes owed should be paid or you will risk accruing additional interest and penalties until the tax amount is paid.

Au pairs on the Department of State’s cultural exchange program are present in the U.S. on J-1 visas. Au pairs present on a J-1 visa are considered nonresidents and usually file a nonresident tax form. However, this does not apply to every situation, and you may have to file a different form, especially if you have been present in the U.S. previously for more than 2 years as a student, trainee, or teacher on an F or J visa. There may also be additional forms if a state return is required. If you are unsure which forms may apply to you, we will be able to evaluate your file to ensure all the proper returns are submitted.

There are a couple of different ways to track the stipend income you receive throughout the calendar year. The best method is to keep a weekly record of the stipend payments you receive from your host family(ies) during the January to December months. There is a stipend payment tracking form available which you can use to track these payments, or if you prefer, you can track them yourself in a different format, such as Excel. Alternatively, if you are able to have your host family(ies) provide a signed year-to-date pay statement that would work as well.

Lastly, in very few situations a W-2 is received. If you received a W-2, simply let us know in the tax organizer and you do not need to worry about providing us additional information related to your stipends.

Your options are to either complete and file the return yourself or get the assistance of a trained tax preparer. If you have not previously filed a U.S. return, it is highly recommended to get the help of a tax professional.

H&R Block is the largest preparer of tax returns in the U.S. and their specialty is individual tax preparation. H&R Block Expat Tax Services, a specialty business within the company, offers an easy, affordable, and virtual option for au pairs. Your tax return will be completed quickly through these three steps:

1. Submit your online registration
After registering, you will receive an introduction email from your client relationship professional with an overview of the process and next steps.

2. Complete and submit a brief organizer
The organizer should take less than 10 minutes and will help us understand your unique tax situation. You will be asked to provide your stipend information and amount directly on the form. Next, we will review the completed organizer and prepare your tax return.

3. Review and approve your completed tax return
You will be notified when your tax return is completed along with an invoice. When payment is received, you can review the return in your secure online portal and provide your signature approval. We will then file the return electronically with the IRS, saving the additional expense of mailing a paper tax return.

How long will it take to prepare my return?
You should typically receive your completed return within 3 days of submitting your completed tax organizer.

We are offering a limited time discounted filing fee of $50 USD for your federal & state tax return. To take advantage of this discount, you simply need to register and return your tax organizer no later than February 29th, 2024. Our price increases to $99 after this date.

While there are available tax benefits for unreimbursed expenses paid to universities, the available credits and deduction are not available to most au pairs. Nonresident taxpayers are unable to claim education related tax benefits, and as the vast majority of au pairs are present on J-1 visas, they will be considered nonresidents for tax purposes.

Au pairs who have been in the United States on a J visa for one or two calendar years are not able to claim the standard deduction. There is one deduction that you could potentially claim. If you filed a state return during 2022, you can claim the amount of taxes you paid as a deduction on your federal tax return. This amount would show on your return from last year.

The amount you may owe in tax depends on when you arrived in the U.S. and how much you have earned since then. Any stipend amount you receive will be taxed at a 10% tax rate (up to $11,000 of total stipend income). So, for instance, if you earned $6,050 in weekly stipends during 2023, the full amount would currently be subject to tax. With a 10% tax rate applied to the $6,050 you would be liable for roughly $600 in tax on your U.S. return. There could potentially be more tax owed if you earned more than $11,000 during the year, or if you owe state taxes.

There are several different methods you can make payment to the IRS. You can pay by using a check from a U.S. bank account or by money order, or even have a direct withdrawal when you file your return. Alternatively, you can make a payment online using a credit or debit card. For more information on how to make payments, please review the additional information section below.

What do I do if I owe tax but cannot pay all of it at once? Fortunately, the IRS provides you with a few options in this scenario to ensure that you stay in compliance. If you are unable to pay the full amount now, you can enter into an agreement to pay the amount within 120 days with no fee (penalties and interest will still accrue on unpaid amounts, although in a short timeframe these amounts will be rather minimal). If you need longer than 120 days to pay, you will need to set up a more formal agreement to pay monthly over a fixed period. For the longer agreement a setup fee is charged. To learn more about these options you can refer to the individual payment plan section of this IRS page.

You are able to pay upfront tax amounts throughout the year which will help to reduce a larger tax liability at the end of the year. You simply need to submit Form 1040-ES (NR) estimated tax payment amounts during the calendar year you are filing for. For instance, amounts submitted during 2024 will be applied to your 2024 tax return. If you end up paying too much, you will receive the excess as a refund. If you pay too little, any additional amounts owed will still be due by the filing deadline.