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Nanny Tax

Highlighted
Level 2

My client is a citizen of Chile. He lived in Florida for 2 months.

While in Florida he hired a nanny and paid her $2,600.00.

The nanny is from the Philippines.

Does my client have to pay taxes for the nanny?

Thanks for your response.

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Highlighted
Level 11

This might help:

Employees of Foreign Persons, Organizations, or Offices
If three conditions exist, income for personal services performed in the United States as a nonresident alien is not considered to be from U.S. sources and is not subject to U.S. taxation. If you do not meet all three conditions, your income from personal services performed in the United States is U.S. source income and is taxed.

The three conditions are:

You perform personal services as an employee of or under a contract with a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in a trade or business in the United States; or you work for an office or place of business maintained in a foreign country or possession of the United States by a U.S. corporation, a U.S. partnership, or a U.S. citizen or resident.
You perform these services while you are a nonresident alien temporarily present in the United States for a period or periods of not more than a total of 90 days during the tax year.
Your pay for these services is not more than $3,000.

https://www.irs.gov/individuals/international-taxpayers/nonresident-aliens-exclusions-from-income 

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6 Replies 6
Highlighted
Level 15

Yes. Your client paid over the threshold amount.


ex-AllStar
Highlighted
Level 11

What is the employer's visa status?  Green card?  Is there a spouse?  What return are you filing?

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Highlighted
Level 2

Thanks for responding.

My client and wife are citizens of Chile. Came to Florida on 09/07/19 and left 10/26/19.

They came for daughter's medical treatment.

Entered US with passports on the ESTA Visa waiver program

The Nanny, citizen of Philipines had a B-1 visa

She was paid $2,650.00

How would I file a tax return for client to pay "nanny tax"? I'm guessing Non-resident.

And also guessing that I have to apply for an ITIN number for nanny?

Much appreciate your input!!

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Highlighted
Level 11

Does the nanny work for them in Chile, also?  What you have is a nonresident alien paying a domestic servant (nonbusiness employment) who is also a nonresident alien.  If you look long enough you might find something that applies to this situation -- I doubt that this country has an interest in taxing it, or paying benefits to the nanny if she keeps coming back part-time in future years -- but then if you found it was taxable,  you would also have to check the tax treaty with Chile to make sure there is no exception.   

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Highlighted
Level 11

This might help:

Employees of Foreign Persons, Organizations, or Offices
If three conditions exist, income for personal services performed in the United States as a nonresident alien is not considered to be from U.S. sources and is not subject to U.S. taxation. If you do not meet all three conditions, your income from personal services performed in the United States is U.S. source income and is taxed.

The three conditions are:

You perform personal services as an employee of or under a contract with a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in a trade or business in the United States; or you work for an office or place of business maintained in a foreign country or possession of the United States by a U.S. corporation, a U.S. partnership, or a U.S. citizen or resident.
You perform these services while you are a nonresident alien temporarily present in the United States for a period or periods of not more than a total of 90 days during the tax year.
Your pay for these services is not more than $3,000.

https://www.irs.gov/individuals/international-taxpayers/nonresident-aliens-exclusions-from-income 

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Highlighted
Level 2

Bob,

This is very helpful...thank you!

Much appreciated!

 

 

 

 

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