When a Family Child Care Provider is an Undocumented Worker
There is a way for an undocumented worker to earn money as a family child care provider, even if they are not eligible to receive a Social Security number.
Although undocumented workers are not allowed to work as employees in the U.S., they can work as a self-employed family child care provider by obtaining an Individual Taxpayer Identification Number (ITIN).
Obtaining this form does not authorize the child care provider to work in the U.S., but it does allow the person to comply with federal tax laws. (The IRS want to collect taxes from everyone!) Failure to pay taxes can get an undocumented worker into trouble with an IRS audit.
With an ITIN a child care provider can report her income and all business expenses and pay federal taxes on the normal IRS tax forms. In addition, parents using her services can claim the child care tax credit. Although they are paying Social Security taxes, undocumented workers are not allowed to receive Social Security benefits, and they cannot claim the Earned Income Tax Credit.
To obtain an ITIN fill out IRS Form W-7 (Application for IRS Individual Taxpayer Identification Number). You must show proof of your identify with a picture ID, a birth certificate, visa, driver's license, national identification card, or foreign voter's registration card. See the instructions to Form W-7 for details.
Many undocumented workers may fear that by applying for an ITIN they will attract the attention of U.S. immigration officers. This is not the case. The IRS will not turn over such information to other U.S. agencies.Complete Form W-7 as soon as you are ready to file your federal income tax return. You must attach a copy of your tax return with this form.
Undocumented child care providers can get help filling out Form W-7 from the IRS by calling 800-829-1040 or visiting an IRS Taxpayer Assistance Center.
Note: Some states or counties may require a child care provider to have a Social Security number to become licensed. Providers may want to try to argue that their ITIN should be accepted in place of a Social Security number.
An undocumented worker cannot obtain an Employer Identification Number (EIN) because getting one requires a Social Security number.
Although undocumented person can operate as a family child care provider she may not hire another undocumented person to work for them in their business.
Image credit: https://pixnio.com/people/female-women/woman-and-her-child
Tom Copeland - www.tomcopelandblog.com
