Daycare Tax Tips

Should this parent give her child care provider a 1099 or a W-2?

Alison's answer: Neither!

A parent writes:

>I pay an individual to babysit my 3yr old child outside my home and pay by personal check each week so that i may work. She has provided me with a background check but refuses to give me her social security number for tax purposes. Can I send a 1099-misc or do I send a w-2? Is it possible to send either form without her social security number?

You can't do anything without the caregiver's social security number, but because the child care is taking place outside of your home, I don't think you need to worry about the 1099-MISC independent contractor form or the W-2 employee form.

Child care taking place in your home generally results in treating the caregiver as an employee. Outside your home, however, I would assume that the child care provider is self-employed. Only businesses need to worry about giving 1099s to self-employed persons. Since your caregiver is providing personal child care services, you are off the hook for that.

You are probably still going to wish you had your child care provider's social security number, however, for the purpose of claiming the Credit for Child and Dependent Care Expenses on your tax return. Give the provider a W-10 Dependent Care Provider's Identification and Certification Form and ask her to fill it out. Document the date. She can face a $50 penalty for not complying. Luckily there are Form 2441 instructions which allow you to claim the Credit for Child and Dependent Care Expenses without the provider's tax id number, if necessary, although how you proceed here will depend on your relationship with the caregiver and whether you wish to continue using her services.

Posted on 2009-12-20 03:51:54