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Give your Tax ID Number to Parents using Form W-10

Family child care providers are not required by law to provide parents with their identification number or to provide parent receipts. If the parent left your program in 2021, you are not required to locate them and provide them with this information.

However, if you have good relationships with the parents in your program, I recommend that you give them an end-of-year receipt that includes your identification number.

Be Proactive

If you do this, have the parent sign one copy for your records. This can protect you if you are audited and asked to provide proof of what your parent paid you for the year. This time of year, many providers give receipts to parents, but most do not keep a copy signed by the parent.

A family child care provider writes:

Just wondering what form to give my parents who have paid for child care so they can do their taxes!

Really, the way it works is that parents are supposed to give you a form to fill out, but they usually don’t know know that.

You are not required to provide any information to parents, unless they give you a blank IRS Form W-10, Dependent Care Provider’s Identification and Certification and ask you to fill it out. You can face a $50 penalty for not giving your correct tax id number or for refusing to fill out the form.

There is absolutely no requirement that you tell parents how much they paid you during the year. They are supposed to keep track themselves.

If you have a parent who owes you money, I would advise you to tell them that you will only give them your identification number after they have paid you in full. The only time you’ll face a penalty is if your parent gives you a copy of Form W-10 and you don’t fill it out. If this occurs, you could face a $50 fine. But, since 99 percent of parents are unaware that they are required to do so, I wouldn’t be concerned.

HOWEVER:

It is a good business practice to proactively fill out the Form W-10 yourself and makes copies for all parents. (Though maybe not for parents who still owe you money.) Write the total amount you were paid by the parent(s) during the year along the top of the form. If you had more than one of their children in your care, break the total down by child. Sign the form yourself and, if possible, HAVE THE PARENT SIGN THE FORM, TOO. Keep it with your tax records.

Providing this kind of year-end receipt is optional, but it will help to avoid situations where parents report having paid you more than they actually did on Form 2441, Child and Dependent Care Expenses.

Note: Do NOT use your social security number as your tax id number on Form W-10. Protect your privacy by using an Employer Identification Number. You can get an EIN now, if you don’t have one. It only takes a few minutes.

featured image by naki-sama

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