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 Notice CP79 – We Denied One or More Credits Claimed on Your Tax Return

The IRS has disallowed one or more of the credits claimed on your tax return. Learn about your options to address IRS notice CP79 from the experts at H&R Block.

What Is Form 1099-G?

If you’ve received unemployment compensation or a state tax refund, you’ll receive Form 1099-G. Learn more about Form 1099-G and how it affects your taxes.

Tax Filing Extension Deadline | H&R Block

Do you need more time to file taxes? Review these time-sensitive tax pro tips to prepare for the tax filing extension deadline. Read more from our pros on the H&R Block blog.

Form 1099-G, Certain Government Payments

Most Forms 1099-G are received for unemployment compensation or from state or local income tax refunds. Learn more from the tax experts at H&R Block.