Do Au Pairs Pay State Taxes? Filing Requirements

An au pair is a young person from another country who lives with a host family in the United States through the Department of State’s J-1 visa cultural exchange program. In exchange for providing childcare, they receive a stipend and an opportunity to attend an American post-secondary institution. The financial arrangement between the au pair and the host family creates tax obligations.

Determining State Tax Liability

For federal tax purposes, au pairs are generally considered nonresident aliens during their first two calendar years in the United States. This status means their days of physical presence do not count toward the Substantial Presence Test. This federal classification exempts them from Social Security and Medicare (FICA) taxes, but state tax laws operate independently from these federal rules.

A state’s definition of tax residency is the primary factor in determining an au pair’s obligation to pay state income tax. Most states base their residency rules on physical presence. If an au pair lives and works in a state for more than a specified period, typically 183 days, they are often considered a resident of that state for tax purposes.

This means that even while classified as a nonresident alien by the IRS, an au pair will likely be classified as a resident by their state’s revenue department. This creates a requirement to file a state income tax return and pay tax on the income earned within that state.

Host Family Responsibilities

From a tax perspective, a host family is considered an employer, and the au pair is their employee. This relationship comes with specific state-level responsibilities, as the weekly stipend paid to the au pair is considered wages.

The host family must register as an employer with their state’s workforce or revenue agency, which typically involves obtaining a state Employer Identification Number (EIN). Host families must also determine their state-level obligations.

While federal income tax withholding is not required for au pairs, some states may mandate it. If the family withholds taxes, they must provide the au pair with a Form W-2 by January 31 of the following year. If no taxes are withheld, the host family should provide a statement of total earnings for the year. Families may also need to pay state unemployment insurance, depending on the state’s rules and the amount of wages paid.

Required Information for Filing

To file a state tax return, an au pair must gather several documents. The first is a valid taxpayer identification number, which is either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). Au pairs are eligible to apply for an SSN, but if unable to obtain one, they must apply for an ITIN from the IRS.

The next item needed is the official record of earnings from the host family. This will be a Form W-2 if taxes were withheld, or a summary of total annual income if no taxes were withheld. Finally, the au pair must locate the correct state income tax return form, which is available on the website of the state’s Department of Revenue.

The State Tax Filing Process

After gathering all necessary documents, the au pair can submit their state tax return. The au pair will transfer financial data from their income documentation onto the state tax form, including total wages and any state tax already withheld.

States offer several methods for submitting a tax return. Many have their own online e-file portals, which guide users through the process and often result in faster processing. Commercial tax software and traditional mail-in paper returns are also options.

Once the return is submitted, the state tax authority will process it. If more tax was withheld than owed, the au pair will receive a refund. If taxes are owed, payment must be made by the filing deadline, typically April 15, either electronically or by mail.