If I use a daycare provider who doesn't claim her income at taxtime, can I claim the daycare cost on my taxes?

Question

She is a home daycare provider and does not bring in enough income from her business to require her to claim it for tax purposes, therefore no tax id number.

Answer 1

assuming that you already meet the other requirements to claim the child care credit, but are missing the required ID number of the provider, you can still claim the credit by demonstrating "due diligence" in attempting to secure the needed information.

When the care provider refuses to give the identifying information, the taxpayer can still claim the credit and is instructed to provide whatever information is available about the provider (such as name and address) on the form used to claim the credit Form 2441 (PDF), Child and Dependent Care Expenses, or Form 1040A, Schedule 2 (PDF), Child and Dependent Care Expenses for Form 1040A Filers). The taxpayer should write "see page 2" in the columns calling for the missing information. He/she would write at the bottom of page 2 that the provider refused to give the requested information. This statement will show that the taxpayer used due diligence in trying to secure and furnish the necessary information.


References:
Publication 503

Answer 2

In order to claim the childcare deduction, you will need either a Federal employer ID or a SSN to assign the payments to. I think that the daycare provider has provided you with some misleading and possibly wrong information. If you examine the tax code, income is defined as "income from any source derived". The provider may not have to file a business tax return, but that income should still be reported on either a personal return or schedule C.

Answer 3

Whether or not she files a tax return isn't a matter of your concern.

However, to get the child care credit, you MUST provide the caregiver's SSN or TIN on your return. She cannot legally refuse to provide that information to you.

(But here's a tip: If she brings in more than $400 a year from all self employment income, she owes tax! If you're getting a year's worth of good daycare for less than $400, you must be dealing with a saint.)

Answer 4

You can claim the childcare as long as she will give you her social security number to claim on your tax return. And, you will need the cancelled checks or receipts to prove how much you paid her. I'm dealing with a similar situation myself right now. Good luck to you, and as I forgot to do, I recommend telling your daycare provider up front that you will be claiming the money you paid on the following year's tax return.

Answer 5

You report the income paid to her using her social security number. She doesnt need to have a federal tax id number. You are entitled to that credit. As long as you have the records to back up what you have paid her you should most definitely claim that amount.
Years ago I used a stay at home mom and our arrangement was that I paid her less than the going rate as neither of us would claim the income/expense. This may be an option for you to disucss with your day care provider.

Answer 6

That was my thought exactly when I read that quote from that xian. 1. Because we have tested this theory repeatedly 2. It's easier for them to convince someone who wants to believe, and is not demanding proof. 3. They will come back with something that is a fallacy and not truth at all, such as "all these book written about mermaids and all the accounts from sailors who have seen them is proof, and mermaids are not a good example because 90% of Americans don't worship mermaids." In other words, valid argument to an extent, but it is not going to get any god fearing Christian to question his/her faith based on comparison to mermaids.

Answer 7

Oh, yeah, you can, but you need proof of payment to her, and you'll probably want to find another provider, as you'll be ratting her out to the IRS. income is income.
You may need her ss #, but in most cases, a tax-prep person can give you the right way to do this.

Check out the IRS web site, as well if you need more answers.

Answer 8

I think as long as you have receipts for the daycare, you can claim the expense.

Answer 9

Yes you can as you are not responsible for their tax situation. You will only need some form or receipt, invoice, or cancelled check to show as proof of payment on your tax return.

Answer 10

I'd use her SSN info and claim you paid this person. Let her deal with her legality from her end.