Return to Index

Do au pairs have to pay nanny taxes?

The term 'au pair' refers to a foreign exchange student admitted to the United States under a student exchange program administered by the US Department of State. An au pair is admitted into the United States with a J-1 visa, and is generally not allowed to remain in the United States longer than 12-24 months. Au Pairs are usually students who participate in the program seeking the program's stated educational and cultural experiences.

An au pair lives with their host family and is provided room and board, an educational stipend, and two weeks paid vacation. The host family pays them a weekly stipend, an amount determined by the program, and the au pair may not work more than 10 hours in a day, no more than 45 hours in a week, and must have two consecutive days per week off. Au pairs are not expected to perform general housekeeping tasks, but are expected to perform child-care functions.

In 1994, the U.S. Department of Labor determined that the au pair stipend constitutes "wages" because an employer-employee relationship exists between the au pair and his host family. Au pair wages are not usually subject to social security and Medicare taxes because of the au pair's status as a J-1 non immigrant and as a nonresident alien. Likewise, au pair wages are not subject to FUTA and state unemployment taxes. Au pairs are subject to income taxation on their au pair stipend. At the current prevailing stipend rate of $157.95 per week, it is likely that the au pair will have an income tax liability on her U.S. individual income tax return because nonresident aliens are not able to claim the Standard Deduction. The au pair, a nonresident alien, will be required to file Form 1040NR or Form 1040NR-EZ to report her au pair wages. The $157.95 per week au pair stipend is based on the $5.85 2007 US minimum hourly wage, subject to adjustment when this number increases.

There are very rare circumstances when an au pair is considered a resident alien and subject to Social Security and Medicare taxes. If this is the case, the host family is subject to all of the same tax and reporting obligations of a nanny employer.

Other helpful information:

• IRS Discussion of Au Pair Taxation

 Return to Index