No. You would have to have a receipt with the providers tax number.
Your employer can provide a “day care” benefit as a cafeteria plan. You would have a gross salary of $35,000 and a dependent care benefit of $10,000 in box 10 of your W-2, and a net taxable salary in box 1 of your W-2 of $25,000. However, cafeteria plans have certain rules that your employer might not want to follow, especially as it pertains to a requirement to offer the same option to other employees.
Or, your employer can pay you $35,000 and you pay the employer $10,000 and get a receipt. You would be able to claim a tax credit that is larger than the tax you would pay on the higher income.
Your employer can’t pay you $25,000 and also give you a discount and not have it be taxable. Everything your employer gives you in return for your service is taxable income unless it falls under one of the employee fringe benefit rules. It sounds like your employer needs to review the fringe benefit rules with their accountant. Day care can be a fringe benefit but certain rules must be followed.
