How can I claim child care credit with no EIN or social?

[tvalencia]

I paid over $6,000 in daycare to a friend for 2014. She is not willing to give me her social to use on my tax return because she does not want to file this with IRS. How can I still get credit? I will lose around $1,000 without it.

[Carl · Accepted solution]

By federal law, daycare providers are required to provide their clients with either their SSN or EIN (Employer Identification Number) no later than Feb 2, 2014 for this year. Failure to do so can and will most likely, result in a audit of that provider with some fairly hefty fines.

While I can understand the reluctance to provide one's personal SSN, the daycare provider does have an extremely easy alternative. They can obtain an EIN on line, in about 10 minutes at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-...  So you might try the friendly, informative approach as you provide this information to your provider.

If they still refuse, then you will need to send your provider a W-10 (Request for Taxpayer Information and Identification Number). Get the form at https://www.irs.gov/pub/irs-pdf/fw10.pdf, fill out what you can and send it via certified mail after making 2 copies for yourself. If the provider does not provide the info within 10 business days, then you can still file your tax return without that information. However, you won't be able to e-file it. You'll have to mail it in. When you mail it, include a copy of the W-9 you sent to the provider, along with a copy of the proof that you sent it to them via certified mail.

You'll still qualify to claim the expense and will get your refund. But it may take a bit longer is all.

[tvalencia]

She isn't an actual daycare center, just a friend who helped me out by watching my kids. And is now stationed in South Korea so I don't have an address to even send the W9 to. It isn't the privacy of SS that's an issue, its the fact that she doesn't want to put that she earned $6,000 on their tax return because they loose money that way. I just wanted to know if I could file without her info. I have bank transfers showing I paid her every month.

[Carl]

In order for you to claim it as a deduction (and you're entitled to) she has to claim it as income and pay taxes on it. There's nothing wrong with you sending it certified mail to the "last know address" either. Then when it's returned as undeliverable, you'll include that notice, along with the W-9's in your paper filing. You'll still get the exemption, and in time, the IRS will hunt down the provider and take care of things from that perspective.
If you don't want to do this, because the friendship means more to you, I can understand that. You just can't claim the childcare expenses then.

[tvalencia]

Bummer. Thanks

[Carl]

Oh, just to clarify. A person doesn't have to be a licensed daycare provider or center. If you paid them for daycare, you're entitled to claim it, and they are obligated and required to report the income.

[tvalencia]

Yes I know. I've done it before because my other day care provider provided me with her social so I could claim it. But this friend who is watching them now refuses to give me her social.

[brendon_krause]

Do not use a W9 form.  For this, a W10 is used instead - <a href="http://www.irs.gov/pub/irs-pdf/fw10.pdf" rel="nofollow" target="_blank">http://www.irs.gov/pub/irs-pdf/fw10.pdf</a>

[Carl]

Didn't realize that even existed. Good to know! Thanks!
The only thing I can see though, is that if you did not use this prior to paying the childcare, and realize you need the provider's SSN or EIN, yet they refuse to provide it, then in that case (only in that case) would you use the W-9 to formally *request* the information. This shows the IRS that you did request it, and supports a claim that the provider refused to provide it. (just a bunch of legality mumbo-jumbo in my opinion, though)

[hugablluvablme]

This information is actually all wrong. She is NOT required to give it to you unless you supply your home daycare with the form W10. If you do not, she is required to give you nothing. If you supply it, then she is supposed to fill it out or face a fine. The fine is $50. If you left owing money, not sure what your circumstances were, but she may rather pay the fine then give you your information. I am actually surprised that the person answering is ill informed.

Yes, you are ILL informed. As a childcare provider for over 11 years and someone who has a tax attorney who specializes in this you are completely WRONG.

A provider (home) is NOT REQUIRED to give you the W10. (she/he didn't even know the right form but says that's nit picking.lol)  YOU as a client must bring a BLANK W10 to be filled out by your provider. (licensed or not does not matter) Once you (the client) bring the BLANK form to be filled out THEN they are required to give you the information. Not before. And they do NOT have to give you ANYTHING unless you REQUEST the info by bringing the BLANK form. If they don't fill it out it is a $50 fine to the provider. If you left owing your provider, most would just pay the $50 than give you the form. However, most good home providers probably give you the form without requesting it providing you are in good standing. BUT there is NO LAW OR REQUIREMENT that they MUST give you anything with you bringing the form. There is also no deadline for them to fill it out by. If you are going to "volunteer" answers you should be up on the information you are providing to people who are trusting you to know.

[Opus 17]

Nitpicking about a W-9 or W-10 form does not change the bottom line.  If the provider refuses to provide his or her tax information, you write "refused" in the SSN box for the credit, and attach a written statement the gives as much identifying information about the provider as you can, and also describes the efforts you made to get the number.  The IRS will then investigate the provider, possibly audit them, and definitely assess tax plus a penalty to the provider for failing to report and pay tax on the income.  If you don't want the IRS to tax and penalize the friend, then you can't claim the credit. (For this reason, friends who provide child care for friends need to discuss the tax implications in advance.)

As for being "ill-informed", when you have volunteered here for 6 years and answered 10,000 questions, you might earn the right to call on of the other volunteers "ill-informed."  Until then, thank you for your tax opinion but keep the personal comments to yourself.

[SweetieJean]

If the care provider information you give is incorrect or incomplete, your credit may not be allowed. However, if you can show that you used due diligence in trying to supply the information, you can still claim the credit.

You can show due diligence by getting and keeping the provider's completed Form W-10 or one of the other sources of information just listed. Care providers can be penalized if they do not provide this information to you or if they provide incorrect information.

If the provider refuses to give you the identifying information, you should report on Form 2441 whatever information you have (such as the name and address). Enter “See Attached Statement” in the columns calling for the information you do not have. Then attach a statement explaining that you requested the information from the care provider, but the provider did not give you the information. Be sure to write your name and social security number on this statement. The statement will show that you used due diligence in trying to furnish the necessary information.
<a href="https://www.irs.gov/publications/p503/ar02.html" rel="nofollow" target="_blank">https://www.irs.gov/publications/p503/ar02.html</a>

[davidhoffman6695]

You can absorb the loss or tattle on her to the IRS. You have to decide what kind of friend she is and what that means to you.

[thedimman]

If it matters in your decision whether to tattle, your friend is evading income tax by not reporting income.  

You will be paying more tax so she won't have to.

[Carl]

What I tell folks, is to require the provider to fill out a W-9 and provide it to you, before you will pay them one single cent for their services.