Daycare Tax Tips

Child Care Provider's Own Children

How do they factor in at tax time?

A family child care provider writes:

>I came across your website when looking for answers to tax questions regarding my in-home child care. I am licensed to care for a total of 8 children. My two (2) children count against those numbers. Can I account for them as paying clients or as loss of income? All in all I would like to know how I can account for my own children in my home child care.

You cannot count your own children as paying clients. They are part of your program, but your own children do not factor into the business income or expenses. You will have lower income because they are taking up head count. That, by itself, will mean paying lower taxes. You cannot take any kind of deduction for the loss of income.

Be aware that you cannot deduct the cost of food served to your own children, but if you receive food program reimbursements for your own children, those reimbursements are nontaxable. All other food program reimbursements are taxable.

You caught me a moment when I was free to respond to your question. Hope this helps.

Posted on 2011-04-04 23:09:38