Will my Provider be taxed or otherwise contacted if I list them for the Child and Dependent Care Credit?

[sniperodie]

My provider is a friend who we pay directly for child care and there is concern that they will be have to pay tax on the payment I provide.

[VolvoGirl]

Yes.  That is self employment income to them.  

[xmasbaby0 · Accepted solution]

Yes.  In order for you to use the childcare credit you have to enter the Social Security number or Tax ID of your childcare provider.  The childcare provider is responsible for reporting that same income on their own tax return.  The IRS matches it up.

[AmeliesUncle]

Your provider is taxed on their income regardless if you claim the Child and Dependent Care Credit or not.

Or you asking if your provider hides their income from the IRS by not claiming it, will listing them on the form for the credit alert the IRS that your provider is hiding their income?