dependent care

[MelanieCPA]

Client used an aupair from Panama to care for their kids. On the 2441, should I use the name, address and fed ID number of the agency through which they hired her?? She is no longer with them.

[Brian EA]

Client used an aupair from Panama to care for their kids. On the 2441, should I use the name, address and fed ID number of the agency through which they hired her?? She is no longer with them.

Did you pay the aupair or the agency?

brian

[GIMoe]

Au Pairs

Client used an aupair from Panama to care for their kids. On the 2441, should I use the name, address and fed ID number of the agency through which they hired her?? She is no longer with them.

2441 should show name, address, and SSN or Fed ID of person (or company) receiving payment for the care provided. Au Pairs are considered Household Employees, requiring a schedule H, W-2, etc... (unless here on a J-1 visa and it is first trip to US, see http://www.irs.gov/businesses/small/...=96420,00.html for more detail). Does the agency have a forwarding address for the Au Pair?

[MelanieCPA]

More questions...

GIMoe - Thank you for the info and link. Am I understanding this correctly: As long as it is the au pair's 1st trip to the US they are not required to withhold taxes on her income or issue her a W-2. They report it on Sch H, and also on Form 2441. Right?

What about the upfront fees they paid to the agency? Are those includable on form 2441?

[GIMoe]

Agency Fees

GIMoe - Thank you for the info and link. Am I understanding this correctly: As long as it is the au pair's 1st trip to the US they are not required to withhold taxes on her income or issue her a W-2. They report it on Sch H, and also on Form 2441. Right?

What about the upfront fees they paid to the agency? Are those includable on form 2441?

I believe they have to be on a J-1 VISA and it has to be their first trip. If both conditions are met, then no W-2, no payroll taxes, no FUTA, etc...

I had a client this year in a similiar situation. I used the Agency fees. From everything I was able to find on it, I couldn't find anything specific that disallowed it. My justification is that the client had to pay these fees in order to provide her childcare. The agency my client went through agreed and readily sent a receipt and their tax ID number.

[gkaiseril]

Incme Tax, Futa, Fica, Medicare, State -- Taxes

Re-read the material very carefully there are many types of taxes and filings discussed. Each requirement has a section heading. There is no hard and fast rule. One needs to look very carefully at the facts of the specific situation. A student that stays on as an aus pairs is different than an aus pairs that comes from a foreign country to be an aus pairs.

The aus pairs no matter what is subject to U.S. income tax and to state income tax if employed in a state with a state income tax and must file the appropriate tax returns. The aus pairs is not required to have federal income tax withheld from their wages but are subject to estimated payments.

[veritas]

Au pair

Fancy name for someone else to raise your kids.

[GIMoe]

Au Pairs

The aus pairs no matter what is subject to U.S. income tax and to state income tax if employed in a state with a state income tax and must file the appropriate tax returns. The aus pairs is not required to have federal income tax withheld from their wages but are subject to estimated payments.

Correct, The Au Pair is required to pay income tax (federal & possibly state) on the income the Au Pair makes while residing in the US. I was only discussing from the client's (the one who paid the Au Pair) perspective.