Daycare Tax Tips


Give your Tax ID Number to Parents using Form W-10

Alison recommends being proactive on this

A family child care provider writes:

> Just wondering what form to give my parents who have paid for child care so they can do their taxes!

Really, the way it works is that parents are supposed to give you a form to fill out, but they usually don't know know that.

You are not required to provide any information to parents, unless they give you a blank IRS Form W-10, Dependent Care Provider's Identification and Certification and ask you to fill it out. You can face a $50 penalty for not giving your correct tax id number or for refusing to fill out the form.

There is absolutely no requirement that you tell parents how much they paid you during the year. They are supposed to keep track themselves.

HOWEVER:

It is a good business practice to proactively fill out the Form W-10 yourself and makes copies for all parents. (Though maybe not for parents who still owe you money.) Write the total amount you were paid by the parent(s) during the year along the top of the form. If you had more than one of their children in your care, break the total down by child. Sign the form yourself and, if possible, HAVE THE PARENT SIGN THE FORM, TOO. Keep it with your tax records.

Providing this kind of year-end receipt is optional, but it will help to avoid situations where parents report having paid you more than they actually did on Form 2441, Child and Dependent Care Expenses.

Note: Do NOT use your social security number as your tax id number on Form W-10. Protect your privacy by using an Employer Identification Number. You can get an EIN now, if you don't have one. It only takes a few minutes.


Last updated 15 October 2015

Posted on 2009-01-22 05:22:19

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