Most family child care providers give parents a receipt at the end of the year showing how much they have paid for the year. Parents use this information to claim their child care tax credit.
Giving parents a receipt each time they pay (weekly, bi-weekly, monthly, etc.) can be helpful for several reasons.
It creates a paper trail that can be used to support the amount of income you claim on your tax return. It can also be used to help resolve any disputes with parents about how much they paid.
A parent receipt should contain these elements:
* A description of what the payment is for (“child care services”, “late fee”, etc.).
* The period of time covered by the payment (“January 1st – 15th”)
* The amount of payment received by the child care provider (“$185”).
* The date the payment was made (“January 1st”).
* Who made the payment (“Sabrina Jones”).
* Signature of the parent and provider.
Where to Get Receipts
You can find general commercial receipts at local office supply stores, or download free receipt templates from the Internet (Google “child care receipt”).
Redleaf Press created receipts specifically for family child care providers: Family Child Care Business Receipt Book which has 150 carbon-copy receipts.
The Minute Menu Kids Pro software allows you to print out a parent receipt for any time period. You can also use the software to print out the IRS Form W-10 to use as an end-of-year receipt.
You can also create electronic receipts through Google Docs or other services and have parents download their receipt.
You are not required by law to give parents a receipt, even one at the end of the year. I’ve written elsewhere about why you should give them an end-of-year receipt and the importance of getting parents to sign a copy for your records: “The Truth About End-of-Year Parent Receipts.”
Some child care providers only give out receipts when requested by parents.
I recommend giving parents a receipt every time a parent pays you because I think it is a good “best practice.”
You can start giving out receipts now, without waiting for the new year to begin.
Don’t give a receipt to a parent until they have paid you first! If a parent wants you to hold their check for a week, give them the receipt after the check clears.
Only give receipts to those who paid you. See my article, “Who Should Get Your Receipt For Child Care Payments?”
Although giving receipts each time a parent pays you may seem like an unnecessary formality, I think that most parents will appreciate it.
Tom Copeland – www.tomcopelandblog.com
Image credit: www.redleafpress.org
For more information on record keeping and parent payments, see my book Family Child Care Record Keeping Guide.