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Old 01-22-2015, 12:32 PM   #1
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Tax question: In Home Childcare

My oldest had three childcare providers in 2014. A big daycare, a SAHM, and an in home daycare. I'm expecting to receive a receipt from the first and last providers to enter expenses on my taxes. What ramifications does entering childcare expenses for that SAHM have on their taxes, if any? I'm not sure it would make much difference on my end because you can only claim so much (I think).

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Old 01-22-2015, 01:26 PM   #2
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Re: Tax question: In Home Childcare

Presumably, she will already be reporting that income. If she doesn't have a business id you'll need a social security number from her iirc. Since she should already report the income it should have no impact on her as long as you are both honest about what she received.
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Old 01-22-2015, 01:27 PM   #3
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Re: Tax question: In Home Childcare

I have no idea, but I'm amazed you are getting a tax document from your in-home daycare. We never get one, I have to keep my own records.
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Old 01-26-2015, 08:12 AM   #4
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Re: Tax question: In Home Childcare

For you to get your daycare tax credit stuff you have to have the SAHM social security number or her tax ID number. If she made more than $500 from watching your child she has to report that income.
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Old 01-26-2015, 08:22 AM   #5
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Originally Posted by tinytotmama View Post
For you to get your daycare tax credit stuff you have to have the SAHM social security number or her tax ID number. If she made more than $500 from watching your child she has to report that income.
This! It is a business for her. I also asked ours to write it on paper in sealed envelope for me to take to my tax accountant (only one that saw it) when i was in college.

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Old 01-26-2015, 08:25 AM   #6
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Re: Tax question: In Home Childcare

Are you trying to get the child care credit? The total amount for that is insanely low IMO (I think 3k per kid). I don't think claiming any childcare expense beyond the credit amount gives you anything, so I'd claim only up to the total credit and leave the SAHM out of it unless she says she wants you to report her income. We've reported our nanny's income in the past and, honestly, it's a pain and it's expensive. In fact, if you have 6k from the other 2 providers and then have to report the SAHM, you'll end up losing money because you'll have to pay into her unemployment and Medicare.

ETA: I do agree that the right thing to do as a citizen is report her earnings and yourself as an employer. But the reality is it will probably cost both of you money to do so. I always talk to my sitters about the pros and cons, and we mutually agree on how to proceed.

Last edited by Palooka; 01-26-2015 at 08:29 AM.
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Old 05-08-2015, 10:17 PM   #7
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Re: Tax question: In Home Childcare

That's the thing - they make it cost everyone money to do so. Disincentive for people to do the right thing. Sigh!
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