I don't know what your contract says or how the court would look at this, but this just stinks! If someone paid me 11 weeks in advance, I'd totally be counting on at least that much notice. The money is paid, they have secured your service for the next 11 weeks. IMO if they change their mind, too bad! They need to wait it out until the fall or be out a lot of money. If it were me I couldn't even refund it if I wanted to. I usually invest most of my money back into the daycare/home as I get it.
This seems so silly anyway. WHY can't she just wait a couple of months to get her into that preschool?? Fall is the typical start date anyway. I just don't get the rush after so long and with you giving her "school" at daycare too. Is this place very hard to get into or something?
I don't know how hurt you are or if you really don't want her there anymore (once she's gone I know I wouldn't) Maybe a compromise would be that she can have that money on account with you to use for babysitting/occasional nights out around your schedule (if you offer that). 11 wks pay though that'd be a lot of nights out...and who knows if she'd even go for it. I don't know I guess. This is tough. I understand your wanting to give it all back and just cut the tie, but the taxes.. What a mess.
Overall I'd stick with, DCMom needs to wait until her credit runs out with you and perhaps she'll take this as a lesson to plan ahead in the future instead of blindsiding people with a request for 11 weeks pay refunded out of nowhere.