IRS Tax Guidance: Foreign Student Nanny

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For many college students all over the world, studying abroad is an exciting part of an educational career. Not only do they get to live in a foreign country, but they also get to experience that country’s culture up close and personal through experiences like classes and work. In fact, many students like this, or “au pairs”, who board temporarily in someone else’s foreign home for a period of time work as a nanny for the family they are living with.

Having a foreign student work for you as a nanny can be a great experience for both the student and your family, but you may be asking yourself, how do taxes factor in with workers like this?

As long as certain requirements are met, you as the employer are not required to withhold or pay-in FICA or other federal income taxes for the student’s services. Keep in mind, the student must be a nonresidential alien, and not make above the applicable threshold during their time of employment. Students cannot work more than 10 hours per day or 45 hours per week, and must be enrolled in no less than 6 semester hours of classes at a post-secondary educational institution. As long as all requirements are met, then you as an employer do not have to pay-in or withhold income taxes for the student’s domestic style work.

However, even though you do not have to pay income taxes for this work, the student you employ is required to claim the wages he or she made, and file an income tax return. As a nonresidential alien, the student must report all au pair wages unless those wages, in addition with any other U.S. source income, does not exceed the personal exemption amount.

Hosting a foreign student can be an incredible lesson in differing cultures for both you and the au pair you employ. While you do not have to pay-in or withhold taxes for the student you host, be sure that they are made aware of their responsibilities to report their individual income. After all, there is no better lesson in a foreign culture than learning about its finances.

For more information on tax guidelines, visit Evolve Financial today.

By | 2017-05-18T13:34:40-05:00 September 21st, 2016|Taxes|Comments Off on IRS Tax Guidance: Foreign Student Nanny