Question

Regarding illegal alien taxes, my nanny is an illegal alien and I paid her under the table. She’s planning on filing a return and using her individual tax identification number. If the IRS asks who she works for, will I be penalized?

Answer

It’s unlawful to employ an undocumented immigrant who can’t legally work in the United States for childcare. When your nanny files taxes, you might face civil or criminal penalties associated with employing her. You should speak with an immigration or employment law attorney for advice on those issues.

Also, the IRS might penalize you for failing to:

  • Properly report wages you paid your nanny
  • Withhold taxes
  • Issue a W-2

When you hire a household employee to work for you on a regular basis:

  • You must verify that the employee can legally work in the United States as either of these:
    • Citizen
    • Alien
  • You and the care provider must each complete part of a form from the U.S. Citizenship and Immigration Services (USCIS). The form is Form I-9: Employment Eligibility Verification.
  • You must keep Form I-9 for your records. You can get Form I-9 and the USCIS employer handbook by:
    • Calling 800-870-3676
    • Going to www.uscis.gov

Related Topics

Related Resources

IRS Letter 728 – Current Balance Due

Your IRS balance due has been assigned to a Revenue Officer. Learn more about IRS letter 728 and how to handle it with help from the experts at H&R Block.

What Is a W-9 Tax Form?

If you need to complete a W-9 tax form, you may be asking what it’s used for and why it’s needed. We explain the purpose and use of an IRS W-9 form.

Top Four Reasons to File an Amended Return

Need help deciding if you need to file an amended return (IRS Form 1040X)? Get the facts from the tax experts at H&R Block.

IRS Letter 2903 – Account Information or Change

The Taxpayer Advocate Service is contacting you about your IRS issue. Learn more about IRS letter 2903 with help from the tax experts at H&R Block.