Can I claim a tax credit if I pay a relative to watch my kid instead of a daycare?
2007-02-08 11:02:31 · 12 answers · asked by Rick H 1 in Business & Finance ➔ Taxes ➔ United States
NO. Only if your relative files the income on their taxes which is unlikely.
2007-02-08 11:07:37 · answer #1 · answered by noneya10000 2 · 0⤊ 4⤋
If the person you are paying to watch the child is someone you or your spouse can claim as a dependent, then no, you can't claim the credit. Also, if your pay your child to provide this care to another child, then the person providing the care has to be at least 19 by the end of the tax year . You can't make payments to your spouse or to the parent of the child. Otherwise, yes you can pay a relative to watch your child, and take the child care credit. You'll need to enter the person's social security number on your return, and their return will be checked to see that they claimed the payments as income.
2007-02-08 20:34:37 · answer #2 · answered by Judy 7 · 0⤊ 1⤋
You can do this if the relative picks up the payments as income, you just have to report that you paid that ssn that much money on your tax return's child care credit. The relative then must pick up that amount as income.
I've not looked this up but it may depend on which relative you're talking about.
2007-02-08 19:13:02 · answer #3 · answered by Jerry 3 · 0⤊ 2⤋
Actually that depends on who the relative is. If you paid your 19 yr old daughter who still lives at home to babysit, then you cannot use the credit. The person you paid must claim the money as income on his/her return as well.
2007-02-08 21:50:43 · answer #4 · answered by Anonymous · 0⤊ 1⤋
Yes, unless the relative is someone who you can claim as a dependent. You must show the care provider's SSN on Form 2441 when you claim the credit.
From your perspective it doesn't matter if they claim the income or not, that's not your problem.
Looks like quiet a few couldn't get it right, but a few of us did.
2007-02-08 19:24:20 · answer #5 · answered by Bostonian In MO 7 · 1⤊ 1⤋
You can use their social security number and still file as a childcare expense. The kicker about it is that your relative will have to claim this as earned income on their taxes, which they will have to file with their taxes.
So, your answer is yes.
2007-02-08 19:12:59 · answer #6 · answered by Summer 5 · 0⤊ 1⤋
Yes, but you have to show proof by providing receipts. When you started paying that relative to watch your kids, in a way that relative became your employee.
2007-02-08 19:08:13 · answer #7 · answered by Virgo27 6 · 0⤊ 2⤋
If they claim the taxes, then you claim the taxes. They keep track of the hours that they care for your child and the amount of $ you pay for it, then you take it to your tax people and they do your taxes w/ it.
2007-02-08 19:11:45 · answer #8 · answered by ksueditz 5 · 0⤊ 2⤋
If they doesn't mind having to pay tax on the money that you paid them. One of the requirements for the Child and dependant Care Credit is that you provide the persons name, address and SSN
http://www.irs.gov/pub/irs-pdf/f2441.pdf...
http://www.irs.gov/pub/irs-pdf/i2441.pdf...
2007-02-08 19:06:24 · answer #9 · answered by Rob 7 · 0⤊ 0⤋
You can if you provided the relative a 1099 for the total of the payments.
2007-02-08 19:09:34 · answer #10 · answered by whatevit 5 · 0⤊ 3⤋