What to Give to Parents: Social Security Number or EIN?

Family child care providers should not give parents their Social Security number.

Parents want this number so they can claim the federal child care tax credit. They can use either your Social Security number or a business identification number..

The reason child care providers don't want to pass out their Social Security number is because of the growing problem of identity theft. Giving out your Social Security number to different families year after year increases the chances that it will fall into the wrong hands.

Instead, get an Employer Identification Number (EIN) from the IRS and give this out to the parents of the children in your program. If you are hiring employees you must get an EIN.

You can get your EIN at www.irs.gov. It will take you less than fifteen minutes to fill out the online screens after which you will instantly receive your number. Only one question may be confusing to answer: "Why is the Sole Proprietor requesting an EIN?" Unless you are hiring employees, answer "Started a New Business" even if you have been in business for years.

There is no fee to get your EIN. If you already have an EIN from a previous business you can use the same number as a child care provider.

If you prefer, you can call the IRS at 800-829-4933 and get your EIN on the phone after answering a few questions.

In a previous blog post I discussed giving parents an end-of-year receipt using Form W-10.

If you have further questions contact me at tomcopeland@live.com.

Tom Copeland - www.tomcopelandblog.com

Image credit: https://www.sbdc.duq.edu/Blog-Item-What-is-an-EIN-and-do-I-need-one

For more information, see my book Family Child Care Record Keeping Guide.