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Archive for January, 2011

Tax Tips for 2010

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Posted by: aferreira on January 24, 2011

As a participant in the CCAP au pair program,  you may want to   consult with your tax advisor, accountant, insurance advisor and/or an attorney regarding any state or federal rules or regulations that you may be required to comply with when you host an au pair. Unfortunately, Cultural Care is not in a position to provide such advice to our host families due to the variations in the law from state to state and to the individual circumstances of each host family.

If your employer requires taxpayer identification numbers, you should use the following:

  • Your au pair’s social security number or ITIN, in reference to payments made directly to your au pair
  • Cultural Care Au Pair’s federal tax ID number in reference to program fees paid to Cultural Care Au Pair. Cultural Care Au Pair’s federal tax ID number is 20-2020345

As a general guideline, the following information might be helpful to your professional advisor or might be issues that need to be explored:

  • Au pairs are here on a J-1 Exchange Visitor Visa. According to the IRS website, au pairs are exempt from Social Security and Medicare taxes as well as Federal Unemployment Tax.
  • Au pairs are required to pay income tax with the exception of Social Security. However, depending on the time of year that the au pair arrives or departs, they may not make the minimum level of income required for taxation in that calendar year.
  • The weekly stipend and the fees paid to Cultural Care may qualify as a tax deductible childcare expense.
  • The IRS does not require host families to file Schedule H (Form 1040).
  • Host families and au pairs may want to inquire about obtaining a social security number for the au pair. In order to qualify for a social security number, the au pair must provide proof of her participation in the au pair program with a letter from Cultural Care. In addition, they will need their passport, I-94 card and DS 2019 form. Please contact us if you need assistance with this.
  • We strongly recommend that you inquire with your professional advisor about specific state laws and requirements which may include, but not be limited to workers’ compensation insurance and state unemployment taxes.
  • We also suggest that you inquire at the state level as to whether your au pair needs a drivers’ license in your state in addition to a drivers’ license from his/her home country.

Account statement
A statement/receipt of payments made to Cultural Care Au Pair is available in your online account’s Payment Center. Please contact your Program Director if you have any questions about payments made or credits owed.

Flexible Spending Accounts
Many employers offer their employees the benefit of a Flexible Spending Account (FSA), such as a Dependent Care Spending Account. You should determine if the program fees and/or au pair stipend qualify for your employer’s program.

Please note that this is intended to be a guide only and is in no way an exhaustive list of the issues you should explore nor is it intended to be legal or tax advice.