Paying childcare provider, using 1099

[Tla425]

Hi this is a bit of a tricky situation. I am require in a custody order to pay my ex’s nanny/household employee $700 per month, since this nanny is not technically my household employee, I don’t dictate where, when or how this nanny works, my Ex does.

Is it correct of me to issue this provider a 1099-NEC for the payments I make to her? The ex nor the nanny file taxes for the Nannie’s income so I’m concerned and trying to do things the correct way to relieve myself of any IRS action.

I pay the nanny directly per the court order. I have began backup withholding because she (the nanny) refuses to provide me with an accurate W-9. The court order states this is work related childcare, is this considered in the course of business or trade and 1099 worthy? 

[Critter-3]

The local court can order anything they like however they cannot dictate what is allowed by the IRS especially when the it goes against the IRS rules.  Sounds like this payment was considered part of the child support you are to pay and not deductible alimony(which is no longer allowed starting with 2019 tax year). 

Let's start with the 1099 ... you could  issue the nanny a 1099 since technically she is working for you as you are paying her fee.  However if you are not the custodial parent according to the IRS rules (meaning the child does not live with you for more then 1/2 of the year) then even if you are allowed to claim the child because the custodial parent issues you an 8332 form you still cannot deduct the day care expense anywhere or take the child care credit.  

[Bsch4477]

Duplicate. 

[Bsch4477]

If you can’t get her tax ID write “refused” in the space for her number on the 1099 and send a copy to both her and the IRS.  

As an aside, not only can you not claim the child care credit, your ex can’t either since she did not make the child care payments herself.