There is no separate tax deduction for hosting an au pair, but host families can claim the au pair’s weekly stipend as a qualifying expense under the federal Child and Dependent Care Credit. The IRS treats that stipend the same as wages paid to any in-home caregiver.1Internal Revenue Service. Au Pairs The credit is worth 20% to 50% of up to $3,000 in care expenses for one child, or $6,000 for two or more children, with the percentage tied to your income. Most host families end up at the 20% floor, which means a maximum credit of $600 or $1,200. Hosting also makes you a household employer, and the payroll obligations that come with that status can eat into the benefit if you’re not ready for them.
Which Au Pair Costs Count
The weekly stipend is the clearest qualifying expense. Agency fees paid to the sponsoring organization may also qualify if they were necessary to arrange the care, since the IRS broadly allows expenses required to obtain childcare.
Room, board, clothing, and other personal items you provide the au pair do not count, even though they are real out-of-pocket costs. Neither does the required educational component of the J-1 program. The State Department mandates that host families pay for au pair coursework, but that payment supports the cultural exchange requirement, not the care of your child, and the IRS draws the line accordingly.
Two other limits matter. You cannot claim expenses for care of a child who turned 13 during the year, except for expenses incurred before the birthday. And the au pair cannot be your dependent or your spouse.2Internal Revenue Service. Topic No. 602, Child and Dependent Care Credit
Who Can Claim the Credit
Four tests decide whether you get to claim anything, all of them from Internal Revenue Code Section 21.3Office of the Law Revision Counsel. 26 U.S. Code 21 – Expenses for Household and Dependent Care Services Necessary for Gainful Employment
The care must be for a qualifying person: a dependent child under 13, a spouse who cannot care for themselves, or a dependent of any age who cannot care for themselves and lives with you more than half the year.2Internal Revenue Service. Topic No. 602, Child and Dependent Care Credit
The expenses must let you (and your spouse, if married) work or actively look for work. Total qualifying expenses cannot exceed the lower earner’s income on a joint return, so a low-earning spouse caps how much you can claim.4Internal Revenue Service. About the Child and Dependent Care Credit
Your filing status must be single, head of household, qualifying surviving spouse, or married filing jointly. Married filing separately is generally locked out, with a narrow exception in IRS Publication 503 for spouses who lived apart for the last six months of the year.5Internal Revenue Service. Instructions for Form 2441
You must also report the au pair’s name, address, and taxpayer identification number (an SSN or ITIN) on your return. Without that number the IRS will reject the credit.2Internal Revenue Service. Topic No. 602, Child and Dependent Care Credit Because you issue the au pair’s W-2, you already have it.
What the Credit Is Actually Worth
Whatever you spend, the IRS caps the expenses that feed the calculation at $3,000 for one qualifying child and $6,000 for two or more.2Internal Revenue Service. Topic No. 602, Child and Dependent Care Credit Total au pair program costs commonly run north of $15,000 a year once stipend, agency fees, and room and board are added up, so only a slice of your spending ever reaches the credit math.
The percentage applied to those capped expenses depends on adjusted gross income. It starts at 50% for AGI of $15,000 or less, drops one point per $2,000 of AGI until it reaches 35% at $45,000, then holds until a second phaseout kicks in. For single filers the rate begins falling again above $75,000 AGI; for joint filers, above $150,000. Both end at a 20% floor at higher incomes.3Office of the Law Revision Counsel. 26 U.S. Code 21 – Expenses for Household and Dependent Care Services Necessary for Gainful Employment
Practically speaking, most families who can afford an au pair sit at the 20% floor. That means $600 for one child ($3,000 × 20%) or $1,200 for two or more ($6,000 × 20%). The credit is nonrefundable: it can zero out your tax bill but not go below it, and any unused portion doesn’t carry forward.
The Dependent Care FSA Tradeoff
If your employer offers a Dependent Care Flexible Spending Account, you can pay au pair costs with pre-tax dollars. For 2026 the household contribution limit is $7,500, or $3,750 if married filing separately.6FSAFEDS. Message Board
FSA dollars reduce the expenses you can put toward the credit dollar for dollar. Contribute $5,000 to a dependent care FSA with two qualifying children and your $6,000 credit cap shrinks to $1,000, which yields a $200 credit at the 20% rate. For higher-income households the FSA usually wins, because it shelters income from both income tax and payroll tax. Run the numbers against your marginal rate before you set your election.
The Employer Taxes You Owe
Hosting an au pair makes you a household employer, and the IRS does not treat that as optional even though the J-1 visa is framed as cultural exchange.1Internal Revenue Service. Au Pairs Before doing anything else you need a federal Employer Identification Number, which you can apply for free online through the IRS and receive immediately, or request on Form SS-4.7Internal Revenue Service. Employer Identification Number
Social Security and Medicare
Au pairs on J-1 visas who are nonresident aliens for tax purposes are exempt from Social Security and Medicare taxes. Their days in the U.S. generally do not count toward the substantial presence test during the first two calendar years of presence for non-student J-1 holders.8Internal Revenue Service. Foreign Student Liability for Social Security and Medicare Taxes1Internal Revenue Service. Au Pairs
The exception: if your au pair previously spent time in the U.S. on an F, J, M, or Q visa as a student, teacher, or researcher, those earlier days can count and can turn the au pair into a resident alien sooner. Once that happens, you owe FICA on any pay period after the change, as long as the annual cash wage threshold is met. For 2026 that threshold is $3,000 per household employee.9Internal Revenue Service. Topic No. 756, Employment Taxes for Household Employees The combined FICA rate is 15.3%, split evenly at 7.65% each (6.2% Social Security plus 1.45% Medicare).10Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
Federal Unemployment Tax
FUTA is not waived by the J-1 visa. It applies once you pay $1,000 or more in cash wages to household employees in any calendar quarter, a threshold most host families hit within weeks.11U.S. Department of Labor. Unemployment Insurance Tax Topic The rate is 6.0% on the first $7,000 of wages, but on-time state unemployment payments give you a credit of up to 5.4%, leaving an effective federal rate of 0.6%, capped at $42 per au pair per year.12Internal Revenue Service. Topic No. 759, Form 940 – Employers Annual Federal Unemployment (FUTA) Tax Return Filing and Deposit Requirements State unemployment insurance is a separate obligation in every state, typically 2% to 4% for new employers.
Federal Income Tax Withholding
You are not required to withhold federal income tax from the au pair’s pay. You may withhold if the au pair requests it and you agree, in which case they give you a completed Form W-4.1Internal Revenue Service. Au Pairs The stipend is taxable income to the au pair regardless, and filing their own return is their responsibility.
The Forms That Tie It Together
Three filings connect the credit and the employer side on your return.
Form 2441 claims the Child and Dependent Care Credit. Part I lists the au pair’s identifying information. Part II runs the credit calculation. If you received dependent care benefits from an employer, Part III comes first and feeds Part II.13Internal Revenue Service. Form 2441 – Child and Dependent Care Expenses5Internal Revenue Service. Instructions for Form 2441 The credit then flows through Schedule 3 to your Form 1040.
Schedule H reports your household employment taxes and attaches to Form 1040.14Internal Revenue Service. About Schedule H (Form 1040), Household Employment Taxes For a FICA-exempt J-1 au pair, this is typically just FUTA. If your au pair became a resident alien and crossed the wage threshold, FICA goes here too. Whatever appears on Schedule H adds to your Form 1040 tax liability, so factor it into any estimated tax payments during the year.
Form W-2 and W-3. You issue the au pair a W-2 by January 31, showing wages in Box 1 and any federal income tax withheld in Box 2. For a FICA-exempt au pair, Boxes 3 through 6 stay blank.1Internal Revenue Service. Au Pairs Copy A goes to the Social Security Administration with a transmittal Form W-3 by the same January 31 deadline, either through the SSA’s Business Services Online portal or on paper.15Social Security Administration. Checklist for W-2/W-3 Online Filing Keep your payroll records at least four years.