Clueless in VA wrote:

- quote -

Here's an IRS web page addressing au pair issues.

http://www.irs.gov/businesses/small/...=96420,00.html

It looks like there is normally no obligation for the host
family to withhold taxes, issue a W-2, or file Schedule H,
but the au pair does have an obligation to report the income
on a 1040NR.

--Chris Ballard

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Clueless in VA wrote:

- quote -

The way it usually works is that the AU Pair who is a nonresident
alien using a J-1 visa files an SS-5 and gets a social security
number in order to work. You hire the Au Pair and pay wages.
Effectively, the Au Pair is a household employee. Assuming
compliance with the J-1 visa, the Au Pair is a nonresident alien
and is not subject to US employment taxes. In addition, there is
no requirement for the household employer to withhold taxes. The
household employer would issue a W-2 and the Au Pair would file
Form 1040NR-EZ reporting the wages and paying any income taxes
that are due. The wages are US source income and thus taxable.
As the Au Pair has a SS# the household employer is eligible for
the child and dependent care credit and in addition may seek
reimbursement from their own employer DCAP plan.

I have not seen an employer DCAP plan reimburse anyone who could
not produce the taxpayer ID # for the child care center, nanny or
Au Pair.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Trying once more to post this. Doesn't look like it went
through the first time...

My apologies for the cross posting, but I'm working on my
taxes and am really anxious about how to handle this issue.

==========
Moderator:
When you crosspost, it comes through misc.taxes.moderated
first. Plus the newsgroup Guidelines frown heavily on
crossposting.
==========

My wife and I hosted an Au Pair in 2005 who lived with us
and took care of our son before and after school. She is a
French citizen and this was her first time in the US. We
used one of the State Department authorized agencies and she
obtained the requisite J-1 Visa. We paid to her the
government mandated stipend of $140 per week, which came out
to $7,000 for the year.

I have a dependent care flexible spending account at work,
which I maxed out to $5,000 in 2005. When making claims
against the account, the administrator (Aetna) told me to
use her Visa number since she didn't have a social security
number. She opened a bank account and got a Virginia driver
license while here and in neither case was required to get a
SSN. Her passport and Visa were sufficient.

I am now doing my taxes (TurboTax) and when it comes to the
provider information section, it asks for name, address and
SSN or EIN. The help file says I can enter TaxExempt if the
provider is exempt and does not have either a SSN or an EIN.

I have been under the impression that as a nonresident alien
on a J-1 Visa, that I wasn't required to withold social
security taxes, medicare, or unemployment taxes for her. I
also didn't think she would need to file a US tax return.
She has recently returned to France and has no plans of
coming back to the US, so I doubt she'd have much interest
in filing a tax return now anyway.

As I've begun reading about the subject on www.irs.gov, I'm
now uncertain about the whole situation. I'm wondering if I
SHOULD have been withholding various taxes (SS? Medicare?
Unemployment?) and if she in fact did need a SSN (perhaps
she should have filed a tax return).

I would GREATLY appreciate any guidance on the matter. If I
should have withheld taxes, and if she should have applied
for and received a SSN, what should I do now keeping in mind
that she's already back home in France. I was ready to file
with "TaxExempt" on the SSN/EIN line. Perhaps I still
should and beg forgiveness/claim ignorance if the matter
ever comes up (i.e. during an audit).

Thanks in advance for any help.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >