Regarding illegal alien taxes, my nanny is an illegal alien and I paid her under the table. She’s planning on filing a return and using her individual tax identification number. If the IRS asks who she works for, will I be penalized?
It’s unlawful to employ an undocumented immigrant who can’t legally work in the United States for childcare. When your nanny files taxes, you might face civil or criminal penalties associated with employing her. You should speak with an immigration or employment law attorney for advice on those issues.
Also, the IRS might penalize you for failing to:
- Properly report wages you paid your nanny
- Withhold taxes
- Issue a W-2
When you hire a household employee to work for you on a regular basis:
- You must verify that the employee can legally work in the United States as either of these:
- Citizen
- Alien
- You and the care provider must each complete part of a form from the U.S. Citizenship and Immigration Services (USCIS). The form is Form I-9: Employment Eligibility Verification.
- You must keep Form I-9 for your records. You can get Form I-9 and the USCIS employer handbook by:
- Calling 800-870-3676
- Going to www.uscis.gov
Related Resources
What triggers the IRS to audit a tax return? Learn how common tax mistakes and errors can be a red flag and affect your chances of IRS issues.
Find the current percentages for federal income tax rates, capital gains tax rates, Social Security tax rates and more from the tax experts at H&R Block.
The key to understanding your w-2 form is decoding the boxes and numbers. Learn how to read your w-2 form with this box-by-box infographic from H&R Block.
The tax experts at H&R Block outline how students and parents can file Form 8863 and document qualified expenses. Read about Form 8863 here.