Beginning in January, or possibly before, there will be families requesting information from you for their taxes to claim the dependent care tax credit. They will need your EIN (or SSN, or ITIN if you do not have one) and signature. If you do not yet have an EIN, you can file for one for free Apply for an Employer Identification Number (EIN) online | Internal Revenue Service (irs.gov). This is one way to safeguard your personal information and protect yourself from identity theft.

Form W-10 (Rev. October 2020) (irs.gov) is linked here. This is likely what a family will bring you with their request. Note the language on the form: “A care provider who does not give you his or her correct TIN is subject to a penalty of $50 for each failure unless the failure is due to reasonable cause and not willful neglect.”

While a family may provide you with a W10, some providers choose to also provide them with a year-end receipt to ensure that the income the provider is claiming matches the expenditures the family is claiming. While a year-end statement is not required, it can decrease the stress of a potential audit if a family tries to claim a different amount of payment than their provider.

Best practices for year-end receipts:

It is tax season and this webinar presented by the Internal Revenue Service provides helpful information for child care providers about tax related issues including:

This webinar can be viewed using Flash Player or Windows Media and there is also a PDF of the powerpoint presentation available.  For more information from the IRS for Family Child Care Providers see the Child Care Tax Center page on the IRS website.

Click here for the webinar.

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