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Unique Employment Rules Applying to G-4 Sponsors of G-5 Employees

HomeWork Solutions has many years of experience providing payroll and tax services to G-4 Visa holders with domestics working in the U.S. on a G-5 Visa. There are some wage and reporting requirements for this employment situation that differ from the standard US ‘Nanny Tax’ rules. These are unique and specific to G-4’s sponsoring a G-5 domestic.

Unique Federal/State Employment Rules

Many G-4 sponsors are unclear about their legal and contractual obligations related to the G-5 employment. The G-4 sponsor is subject to the rules of their sponsoring organization (the World Bank, IMF, etc.), the terms of the contract they entered into with the G-5 employee as part of the visa process, and U.S. and state employment tax and labor laws. Most sponsoring organizations stipulate that the G-4’s employment records are subject to periodic audit, and violations can jeopardize their continued employment by the sponsoring organizations.

  • The G-4 visa holder who is the G-5’s sponsor is the ONLY person who may employ the G-4. Be very careful to have ALL tax accounts established in the G-4 sponsor’s name ONLY.
  • The G-5 must be paid for a minimum of 35 hours work per week for every week the G-5 is physically present in the U.S. and able to work. (Some NGOs stipulate a minimum 40 hour work week.)
  • The G-4 sponsor must report the dismissal of the G-5 to the sponsoring organization.
  • The wage paid to G-5 domestic sponsored by the G-4 staff member is subject to US taxation (Employment Taxes and Income Taxes). The G-4 sponsor is required to report and remit all U.S. employment taxes.
  • The G-4 sponsor is a U.S. Employer and MUST obtain a Social Security Number [from the Social Security Administration] before they can register with the U.S. government as an employer.
  • The G-4 Employer who IS NOT required to file a US Income Tax Return may pay all of the Federal Employment Taxes on an annual basis, no later than April 15 following the close of the calendar year. Most states require quarterly wage reporting and collect unemployment taxes on a quarterly basis.
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