Yes, you can still deduct child and dependent care credit for paying someone cash to care for your qualifying child while you work or look for work. You will be required to have their social security number or federal ID #, and their name and address to file the child and dependent care credit.
Do you have their ssn and name and address and records of how much you paid them? Was it due to working?
Yes, IRS will expect them to claim the amount received as income on their return.
Here are the rules for deducting child and dependent care credit:
If you paid someone to care for your child or other qualifying person so you (and your spouse if filing jointly) could work or look for work in 2020, you may be able to take the credit for child and dependent care expenses.
In addition, if you (or your spouse if filing jointly) received any dependent care benefits for 2020, you must use Form 2441 to figure the amount, if any, of the benefits you can exclude from your income. You must complete Part III of Form 2441 before you can figure the credit, if any, in Part II.
You (and your spouse if filing jointly) must have earned income to take the credit or exclude dependent care benefits from your income.
But, see If You or Your Spouse Was a Student or Disabled, later, if either of these circumstances apply.
The requirements for your "qualifying child" are as follows:
A qualifying person is:
1. A qualifying child under age 13 whom you can claim as a dependent. If the child turned 13 during the year, the child is a qualifying person for the part of the year he or she was under age 13;
2. Your disabled spouse who wasn't physically or mentally able to care for himself or herself;
3. Any disabled person who wasn't physically or mentally able to care for himself or herself whom you can claim as a dependent or could claim as a dependent except: a. The disabled person had gross income of $4,300 or more, b. The disabled person filed a joint return, or c. You (or your spouse if filing jointly) could be claimed as a dependent on another taxpayer's 2020 return.
Please refer to the following link for additional information:
IRS instructions for form 2441
