Any money you earn caring for children is taxable income, no matter how small the amount. If a parent pays you $15 for one day of care and you never see the parent again, you must report the $15 (or… Read More ›
Ask Tom > Parents & Taxes
Yes, under two circumstances. First, if you are caring for six children or fewer (not counting your own children) parents can claim the credit. In this situation it doesn’t matter if you are in violation of your state’s child care… Read More ›
No. Money you don’t receive from parents is not a business loss you can deduct. Whether you call it a scholarship, a discount or money the parent owes you, it’s not an expense. Because you received less income than you… Read More ›
You report income in the year you receive it. So, a check you receive in December is income for December, not January. This is true even if you don’t deposit the check until January.
No. Parents can only claim the child care tax credit with money they spend to enable them to work or go to school. This gift card to you isn’t directly for child care services, so it doesn’t count towards the… Read More ›
No way. Any money you receive from parents is taxable income. A few family child care providers try to avoid paying taxes by not reporting their income. They get parents to agree not to claim the child care tax credit… Read More ›
I provide special services such as overnight care, date nights and care while parents shop on Sundays. Should I give parents separate receipts for these special services?
Parents can only claim the child care tax credit if they pay someone to care for their child while they are working or attending school. Assuming that is not the case for the times you provide special services (overnight, date… Read More ›
I know that there are times when one of my parents is not working while I’m caring for her child. Should I subtract payment for those days when I give her a receipt at the end of the year?
No. Even though parents are only entitled to claim their child care tax credit if they are working or attending school, it’s not your job to police this. You may not have all of the facts. Give her a receipt… Read More ›