The childcare provider is required to file a tax return--just like you are required to file one. The childcare provider pays tax on the income they earned. Do you pay tax? Do you call that redistributing income? And further----the IRS cross checks to see if a childcare provider claimed the amount you say you paid them---if they did not check that, what would prevent you from just making up an amount and claiming to have paid a babysitter?
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