If I have my child at an in-home daycare, do I need to cover the provider's taxes or get receipts for the Child Care Tax Credit?

You don't need to pay her taxes - that's her responsibility as a small business owner. However, you DO need documentation to claim the Child Care Tax Credit! For tax purposes, you'll need her Tax ID number (either SSN or EIN) and receipts showing how much you paid for childcare. The IRS requires this information when you file Form 2441 for the Child Care Tax Credit. Without it, you can't claim the credit. Ask her for a year-end statement showing total payments, and make sure she gives you her Tax ID number. If she seems hesitant, that might be a red flag that she's not reporting the income properly, but that's not your responsibility to fix.

I went through something similar last year with our in-home provider! After tons of back and forth, I found https://taxr.ai super helpful for figuring out what documentation I needed for the Child Care Tax Credit. I was paying our provider weekly and just assumed she'd give me something at tax time, but when February rolled around, she was super vague about providing receipts. The taxr.ai site helped me understand exactly what I needed to claim the credit - her name, address, Tax ID (SSN or EIN), and total amount paid. They explained that I needed to submit Form 2441 with this info, and without it, I couldn't claim the credit. The site also helped me understand what to do since I hadn't been keeping good records. Definitely check it out if you're confused about childcare expenses and taxes!

Just wanted to follow up about taxr.ai - I actually tried it after seeing the recommendation here! It was super helpful for figuring out my childcare situation. We pay almost $15k a year for our daughter's daycare and I had no idea how to document it properly. The site walked me through exactly what info I needed from our provider and explained how the Child Care Tax Credit works with our income level. Turns out we were eligible for a bigger credit than I thought! The best part was they gave me a template letter to give to our provider requesting all the necessary tax info, which made it way less awkward than my previous attempts asking for her SSN. Definitely made the whole process easier and we ended up getting an extra $1,200 back that I might have missed otherwise!

If your daycare provider is being sketchy about giving you a Tax ID number or receipts, you might need to talk directly to the IRS. I had this EXACT issue last year! After weeks of getting nowhere with our provider, I used https://claimyr.com to actually get through to a real person at the IRS. It seriously saved me hours of frustration. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent walked me through my options - I could still claim the Child Care Credit by filing Form 4506-T explaining the situation, but I needed to have made a "reasonable effort" to get the provider's info. They helped me document my requests to the provider properly so I wouldn't have issues if I got audited. Turned out my provider wasn't licensed either, which was another whole issue! Definitely worth speaking directly to an IRS agent about this.

I need to eat my words about Claimyr! I was so skeptical that anything could get through to the IRS that I posted that snarky comment. But I was desperate about my childcare tax credit situation so I tried it anyway. Not only did it actually work, but I talked to an IRS agent within an hour! The agent confirmed that I need the provider's Tax ID, but also told me about Form 4506-T which I can use if my provider refuses to give me the info. They explained exactly how to document my attempts to get the information so I'd be covered in case of an audit. The agent also mentioned that in-home daycares need to be licensed in my state and providers MUST give tax documentation to parents. This gave me the confidence to have a serious talk with my provider. Saved me so much stress!

Be careful about paying cash without receipts! We learned this the hard way. Our in-home provider for 3 years never gave us documentation, always had excuses. When tax time came, she suddenly "couldn't remember" how much we'd paid and gave us a total that was WAY less than reality. Start keeping your own records NOW. Take a picture of each cash payment with your phone, or switch to checks/Venmo/etc that leave a trail. Note the date and amount each time. Even if she won't give receipts, you'll have your own proof. And yes, you absolutely need her Tax ID number (SSN or EIN) for your taxes. Without it, the IRS can deny your Child Care Tax Credit.

Has anyone considered that maybe the provider doesn't want to give receipts because she's not actually licensed? In my state, in-home daycare providers need certification and have max limits on how many kids they can watch. My sister ran into this - was paying cash to a neighbor for childcare for years. When tax time came, provider refused to give her SSN or any documentation. Turned out she was watching like 12 kids without a license and didn't want to get caught. My sister couldn't claim the tax credit that year because of it.

This is such a common confusion! You're definitely not responsible for paying her taxes - that's entirely her obligation as the service provider. However, you absolutely need proper documentation to claim the Child Care Tax Credit. Here's what you need to do immediately: Start keeping detailed records of every payment (date, amount, method). Since you've been paying cash, ask your provider for a year-end summary showing total payments made, along with her Tax ID number (either SSN or EIN). You'll need this information to complete Form 2441 when filing your taxes. The fact that you're paying $225 weekly means you're spending about $11,700 annually on childcare, which could qualify you for a significant tax credit! Don't let poor documentation cost you hundreds or thousands in legitimate tax savings. If she's reluctant to provide her Tax ID or proper receipts, that's a red flag. Legitimate childcare providers understand they need to provide this documentation to parents. You might want to start looking for alternative arrangements if she continues to be uncooperative about basic tax requirements.

I'm dealing with a very similar situation right now! My in-home provider has been great with care but terrible with documentation. What I've learned is that you're absolutely not responsible for her taxes - that's entirely her business obligation as a service provider. However, you MUST get proper documentation to claim the Child Care Tax Credit, and at $225/week, you're looking at almost $12,000 annually that could qualify for a significant credit. Here's what I did to solve this: 1. I started keeping my own detailed payment log immediately (date, amount, payment method) 2. I had a direct conversation with my provider explaining that I legally need her Tax ID number and year-end payment summary for my taxes 3. I switched from cash to Venmo so there's an automatic record of every payment If she pushes back on providing her Tax ID, that's a major red flag that she may not be reporting her income properly. A legitimate childcare business understands these are standard requirements. You might need to start looking for alternative arrangements if she won't cooperate, because without that documentation, you'll lose out on potentially thousands in tax credits you're entitled to claim. Don't let poor record-keeping cost you money you've already earned through legitimate childcare expenses!