Can I claim the Child and Dependent Care Expenses Credit with childcare across the border?

You've got an interesting cross-border situation! The Child and Dependent Care Expenses Credit generally requires that you have qualifying expenses for care provided so you (and your spouse if filing jointly) can work or look for work. While there's no specific prohibition against foreign childcare providers, there are some hurdles. For the credit, you need to identify the care provider on Form 2441, including their name, address, and tax identification number (SSN or EIN for US providers). For foreign providers without a US tax ID, you'll need to write "FOREIGN" in the space for the tax ID number. The bigger issue might be proving that these are legitimate childcare expenses. Since you mention cash payments without receipts, you'll want to create your own records - track all payments, dates, and have the provider sign something acknowledging the arrangement if possible. Bank withdrawal records showing regular cash withdrawals matching your claimed expenses could help support your case. Also, remember that the maximum qualifying expenses are $3,000 for one qualifying person and $6,000 for two or more qualifying persons, with the actual credit being a percentage of those expenses based on your income.

After reading about your cross-border childcare situation, I wanted to share something that helped me with a somewhat similar documentation issue. I was using an in-home provider who didn't have proper tax documentation and was getting anxious about claiming the Child and Dependent Care Credit. I discovered taxr.ai (https://taxr.ai) which helped me analyze my specific situation and documentation needs. It walks through exactly what records the IRS expects for cases like yours where traditional documentation isn't available and suggests alternative documentation methods. Their system specifically addressed foreign care provider scenarios and helped me understand how to properly document my claim. For my situation, they recommended creating a payment log, having the provider sign monthly receipts (even handwritten ones), and documenting the cross-border work situation. It gave me confidence that I was claiming the credit correctly despite the unusual circumstances.

Just wanted to update after trying taxr.ai for my Canadian childcare situation. I was honestly surprised - the system specifically addressed cross-border childcare and gave me a complete documentation plan. It showed me that I CAN claim the Child and Dependent Care Credit for the care my Canadian relatives provide as long as I have proper documentation. The best part was it walked me through creating a retroactive documentation package for my 2024 return with templates for receipts and attestation letters. They explained exactly how to handle the "FOREIGN" provider situation on Form 2441. I had three tax preparers tell me previously that I couldn't claim this credit for foreign care, but the system showed me specific IRS guidance proving otherwise. Already submitted my amended return!

For anyone dealing with IRS questions about the Child and Dependent Care Credit in cross-border situations, I struggled with this exact issue. The IRS flagged my return for review when I claimed this credit with a foreign provider. I spent WEEKS trying to get through to someone at the IRS who could actually help. After 15+ attempts and hours on hold, I found Claimyr (https://claimyr.com). They have this service that gets you connected to an actual IRS agent, usually within 15-45 minutes instead of waiting for hours or getting disconnected. There's a demo video here: https://youtu.be/_kiP6q8DX5c The IRS agent I finally spoke with confirmed that yes, you CAN claim the credit for foreign childcare providers, but documentation is critical. They helped me understand exactly what they needed to see to approve my claim. Seriously saved me thousands in disallowed credits!

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it since I've been fighting with the IRS for months about my Child and Dependent Care Credit claim for my kids who stay with relatives in Guatemala during summer. I was honestly shocked when I got connected to an IRS agent in about 30 minutes after trying for WEEKS on my own. The agent actually pulled up my file, reviewed my documentation issues, and confirmed that foreign childcare DOES qualify as long as it enables you to work and you have proper documentation. He explained that writing "FOREIGN" for the tax ID and creating my own receipt system with signed statements from the provider would satisfy their requirements. Saved me over $2,100 in disallowed credits! Sorry for being such a doubter earlier.

Just want to add something important about the Child and Dependent Care Credit - you need to make sure both you AND your qualifying dependents have valid SSNs. If your children are US citizens but living in Mexico with you, double check they have SSNs. If they're not US citizens, they'll need to be qualifying residents with valid SSNs to be eligible for this credit. Also, your children need to have lived with you for more than half the year (which sounds like they do), and be under 13 years old when the care was provided (or disabled dependents of any age).

hey just want to share my experience. i was doing care across the tijuana border too, but my tax lady told me i needed to have the provider fill out a w-10 form (its like a tax form for childcare providers) and she said they need a TIN or something. when i tried getting this from my mexican provider they got really nervous and didn't want to sign anything. so i ended up not claiming the credit :( has anyone had luck getting mexican providers to fill out paperwork??

I've been dealing with a similar cross-border childcare situation for years, and I can confirm that you CAN claim the Child and Dependent Care Credit even with a Mexican provider! The key things to know: 1. The IRS doesn't prohibit foreign childcare - they care that the expenses enable you to work, not where the care happens. 2. On Form 2441, write "FOREIGN" where it asks for the provider's tax ID number. Don't stress about getting a US tax ID from your Mexican provider. 3. For documentation with cash payments, create your own paper trail: keep a monthly log of payments, dates of service, and provider's name/address. If possible, get your provider to sign simple receipts (even handwritten is fine) acknowledging the payment and service dates. 4. Your $8,400 total is above the $6,000 limit for two qualifying children, so you'd only be able to claim up to $6,000 in expenses anyway. 5. Since you're filing as Head of Household and working in the US, you definitely meet the "care to enable work" requirement. Your previous tax preparer was wrong - many don't know the rules for foreign providers. The IRS has accepted foreign childcare expenses for decades as long as they're properly documented. Just make sure you keep good records going forward!