FSA for babysitter

[Thompso1ct]

Hello, I have $5000 taken out of my paycheck pretax every year for dependent child care expenses.  This school year because my children are distance learning I’ve had to hire a babysitter.  I pay approximately $800/month.  I tried to submit for reimbursement from my FSA but they are asking the babysitter to sign a form verifying her services.  She’s 19 and doesn’t want to sign.  What am I supposed to do?  How can I get reimbursed?

[VolvoGirl]

Did you get her Social Security number when you hired her?  You can't get the Child Care Credit or Expenses without reporting her ssn.  Sorry.  You should not pay anyone without getting their ssn.

[Thompso1ct]

No, I didn’t.  It didn’t even occur to me- this is new territory.  

[Thompso1ct]

If she gives me her ssn, does she get taxed?  Do I get taxed?

[Anonymous]

regardless of whether or not she gives you her SSN, you paid her enough where she would owe at least self-employment tax. you could tell her that you will have to report her to the IRS so you can file the necessary tax forms for yourself.  but first, suggest to her that rather than her SSN she can go to the IRS website an get an EIN immediately.  it's up to you as to whether or not you inform her that she may have tax filing requirements.  

[xmasbaby0]

She does not have to provide her SSN but she can easily get a Tax Identification Number from the IRS:

https://www.irs.gov/individuals/international-taxpayers/taxpayer-identification-numbers-tin

In order for you to get the childcare credit or use your savings plan money per the rules, you need her SSN or Tax ID.  And---going forward---always get that information upfront from your childcare providers to avoid misunderstandings and confusion.

The babysitter is supposed to report her income to the IRS as self-employment income.  When you report the amount you paid for childcare on your tax return, the IRS matches that up with what she reports on her tax return--using her SSN or Tax ID.  You say she is only 19-- so likely not very savvy regarding tax laws and maybe getting some poor advice from others.  You don't want to get her in trouble but you want to use your FSA funds and possibly enter the childcare credit on your tax return.  She will need to learn how it works.

When a childcare provider will not give you a SSN or Tax ID

If they still refuse to provide an EIN or SSN, send your provider a W-10 (Request for Taxpayer Information and Identification Number).  You can get a copy of the W-10 by clicking here: W-10 Form & Instructions  Complete as much of the form as you can and send it via certified mail (after making copies for yourself).

If the provider does not respond within 10 business days, you can still file your return.  However, you won't be able to e-file.  Print and mail in your return, along with an explanation and a copy of the W-10 you sent your provider.

[xmasbaby0]

@Thompso1ct  You said this is all "new territory"---so--- first child--first experience having a childcare provider?  You did not mention whether the sitter worked in your home or her own home--and it might make a difference in what you are supposed to be doing.  If she took care of your child in YOUR home she may be a "household employee."  You need to read up on what that entails:

https://ttlc.intuit.com/community/tax-topics/help/who-is-considered-a-household-employee/00/26770

https://ttlc.intuit.com/community/forms/help/do-i-need-to-file-irs-schedule-h/00/25742