Daycare Tax Tips

What to do if a parent gives you a 1099

Alison's answer: Nothing!

A family child care provider writes:

> I am a family daycare provider. One of my clients has given me a 1099-Misc for 2009. I have never dealt with this before and am not sure if this is even legal. His wife worked 6 months last year but I had her son in my daycare all of last year and her daughter for 6 months. He is a contractor. It looks to me like he wants to write daycare off as a business expense. Is this legal?

The good news is that you do not have to be concerned with what your client might or might not be doing. Daycare is not generally a legitimate business expense, but it won't affect you, no matter what he does.

The fact that the parent gave you a 1099-MISC is also nothing to worry about. I had a provider call me the other day who was confused for the very same reason. I'm sure you are reporting the child care income received from this parent, so just file away the 1099 and forget about it.

The only time you should be concerned about receiving a 1099-MISC is if the amount of "nonemployee compensation" shown in box 7 is higher than what you were actually paid. Though, if it's just slightly off, I still wouldn't worry about it. As long as you are reporting all of your child care income on Schedule C of your income tax return, you are fine.

Normally, child care parents do not give 1099s to their providers. This is because child care is a personal service, not a business service. If they choose to prepare the form, however, it won't hurt you.

Posted on 2010-02-04 21:35:11