Daycare provider refusing to give 1099 for childcare tax credit - paying in cash

This is unfortunately a common issue. The daycare provider is likely trying to avoid reporting the income on her taxes. However, you absolutely have the right to claim the Child and Dependent Care Credit, which requires her tax information. First, don't worry about getting in trouble yourself. You've done nothing wrong by paying in cash as long as you can document the payments. Start gathering evidence of your payments - bank withdrawals, any text messages about payments, and a log of dates and amounts. You should politely but firmly explain to the provider that you need her tax information to claim a credit you're legally entitled to. Remind her that you can document all payments made. Licensed daycare providers are required to provide their tax ID information to clients. If she continues to refuse, you can still claim the credit by filing Form 8332 with your taxes, which explains that you attempted to get the information but the provider refused. You'll need to provide the daycare's name, address, and whatever identifying information you have.

I went through something similar with my son's daycare last year and found this amazing tool called taxr.ai (https://taxr.ai) that actually helped me figure out how to handle it. I was super stressed about the whole situation, especially since we paid nearly $5K in cash too! The site has this document analyzer that reviews your specific situation and tells you exactly what forms you need and how to proceed. I uploaded my payment records, and it confirmed I could still claim the Child and Dependent Care Credit even without the provider's TIN by using "REFUSED" on Form 2441. It also generated a formal letter I could give to the daycare provider explaining their legal obligation to provide their tax ID info, which actually worked in my case! The provider finally gave me her SSN when she realized I knew my rights.

I was really skeptical about using taxr.ai when I commented earlier, but I decided to try it for my own childcare tax issue. I'm honestly shocked at how helpful it was! The document analyzer immediately identified exactly what I needed to do for my situation with my home daycare provider who was being difficult about providing her EIN. The system generated a perfect letter citing the specific tax regulations that apply, and when I sent it to my provider, she called me the next day with her tax information! What really impressed me was how it walked me through documenting my cash payments properly so I'd have backup if there were ever questions. It even flagged a specific childcare expense I hadn't realized was eligible for the credit. Definitely worth checking out if you're in this situation.

After reading all this, I remember being stuck on hold with the IRS for HOURS last year trying to figure out a similar childcare credit issue. Total nightmare. Finally discovered Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in about 15 minutes. They have this demo video that shows how it works: https://youtu.be/_kiP6q8DX5c My situation was slightly different - I had the provider's info but the IRS kept rejecting my return because it didn't match their records. The IRS agent I spoke to was able to verify the correct information right on the call and told me exactly how to file properly. Saved me so much frustration! They basically call the IRS for you, wait through all the hold times, and then connect you once an actual human picks up. Game changer if you need to talk to the IRS directly about this kind of situation.

I need to apologize for my skeptical comment earlier. After yet another failed attempt to reach the IRS on my own (3 hours on hold before getting disconnected!), I gave Claimyr a shot out of desperation. I was completely wrong. The service had me connected to an actual IRS agent in about 20 minutes. I explained my situation with a daycare provider refusing to provide their EIN, and the agent was incredibly helpful. They confirmed I could file using "REFUSED" and gave me specific instructions for documenting my case. The agent also suggested sending a certified letter to the daycare provider requesting the information in writing, which creates a paper trail. They even told me about a potential audit risk reduction technique - submitting bank statements showing the cash withdrawals that align with my daycare payment schedule. This was advice I couldn't find anywhere online!

Just wanted to add something important - make sure you're not caught in the middle of her tax evasion. While you haven't done anything wrong by paying cash, consider switching to a payment method that leaves a clearer trail. Even if you continue with the same provider, maybe start using money orders or a payment app that provides records. Document EVERYTHING from now on. Take photos of your child at the daycare, keep text messages discussing care or payments, and record dates/times of drop-offs and pickups. This creates evidence of the childcare relationship beyond just the money changing hands. Also, licensed daycares typically have to display their license somewhere visible. Take a photo of it if possible - it often has their business name and license number which can help the IRS identify them if needed.

Just a heads up - the Child and Dependent Care Credit form (Form 2441) actually requires you to show that you made a "reasonable effort" to get the provider's TIN. If the provider won't give it to you, you need to be able to show that you actually tried to get it. I'd recommend sending a formal request via certified mail (keep a copy) that specifically asks for their tax ID for Form 2441 purposes. This creates a paper trail showing you made a good faith effort. When I went through this, I included a blank W-10 form (Request for Taxpayer Identification Number) with my letter, which is the official IRS form for requesting this information. You can download it from the IRS website.

This is a really frustrating situation, but you have several good options here. The most important thing to understand is that you're absolutely entitled to claim the Child and Dependent Care Credit regardless of how you paid - cash payments don't disqualify you. I'd recommend taking a two-step approach: 1) Send her a formal written request (email or certified letter) asking for her EIN or SSN, explaining that you need it to claim the childcare tax credit. Include a specific deadline (maybe 10 business days). This creates documentation that you made a reasonable effort to obtain the information. 2) If she refuses, you can still claim the credit by entering "REFUSED" in the provider identification section of Form 2441. Make sure to keep detailed records of all your payments and any communications about this request. Since you're planning to leave anyway, I wouldn't stress too much about the relationship. Licensed daycare providers are legally required to provide this information to parents who request it for tax purposes. Her refusal suggests she may not be reporting this income, but that's her problem, not yours. The $4,100 you've paid could result in significant tax savings, so it's definitely worth pursuing. Don't let her tax avoidance cost you money you're legally entitled to save.