Does my employer report my daycare provider to the IRS if they pay me the Child care benefits?

[TB2019]

My mom keeps my children and we pay her but she is on SS.. and can't make more money

[MichaelL1 · Accepted solution]

Your employer has a qualified Child care plan and must document where the payments go to, and the amounts each year.

If they do not pay your day care provider (your mother) they would not provide that information to IRS.

If you claim day care on your tax you would have to provide your mother's name and SSN.

Also your mother could be audited by IRS and get in trouble for not claiming income on a tax return. Audited or not, she should report her income on the return, as required by the IRS tax code.

[TB2019]

What if we pay her by the way of paying her bills.. so never really giving her cash?

[MichaelL1]

Be careful, if you do this, you are in essence still paying her for childcare in the eyes of IRS.  You are doing this (paying her bills) because she is providing you daycare. Unless you did this before she started providing daycare for you.

[xmasbaby0]

"she is on SS.. and can't make more money"  Perhaps you or she do not understand the rule of working while you are receiving Social Security benefits.
Before you reach full retirement age, if you continue working while drawing SS, your benefits can be reduced if you earn over a certain limit. (For 2017 that limit is $16,920 —for 2018 it will be $17,040—for 2019 it will be $17,640)  After full retirement age, no matter how much you continue to earn, your benefits are not reduced by your earnings;