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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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Old 11-15-2017, 06:31 AM
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Default Daycare Paid As A Gift

I just had a grandparent write a check for their grandchild's daycare for the month of December as a Christmas gift to their son and daughter in law.


I've never had that happen before. I obviously cannot put that on their deductible total for the year, right?

I have grandparents a receipt and grandma asked if she could deduct it. I'm assuming no- they're not her dependents. Maybe as a gift? Idk.
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Old 11-15-2017, 03:29 PM
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Default gift

Quote:
Originally Posted by daycarediva View Post
I just had a grandparent write a check for their grandchild's daycare for the month of December as a Christmas gift to their son and daughter in law.


I've never had that happen before. I obviously cannot put that on their deductible total for the year, right?

I have grandparents a receipt and grandma asked if she could deduct it. I'm assuming no- they're not her dependents. Maybe as a gift? Idk.
Payment by the grandparent cannot be claimed by the parent towards the parents child care tax credit. The grandma can't claim the child care tax credit because the child is not their dependent. It's a gift from them, but there is no tax benefit to the grandparents. You must report it as income.
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Old 11-15-2017, 05:41 PM
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Quote:
Originally Posted by daycarediva View Post
I just had a grandparent write a check for their grandchild's daycare for the month of December as a Christmas gift to their son and daughter in law.


I've never had that happen before. I obviously cannot put that on their deductible total for the year, right?

I have grandparents a receipt and grandma asked if she could deduct it. I'm assuming no- they're not her dependents. Maybe as a gift? Idk.
It's not required, but to make myself feel better I'd do it just like I do for divorced parents. Give a end of year statement that lists the total each person paid me. What they do with that info is up to them, but I claim it as income either way so it doesn't matter one wit to me.
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Old 11-15-2017, 05:53 PM
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Originally Posted by TomCopeland View Post
Payment by the grandparent cannot be claimed by the parent towards the parents child care tax credit. The grandma can't claim the child care tax credit because the child is not their dependent. It's a gift from them, but there is no tax benefit to the grandparents. You must report it as income.
However, if the grandma had written the check to the parent and the parent paid then they could claim the tax credit, right?
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Old 11-15-2017, 07:52 PM
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However, if the grandma had written the check to the parent and the parent paid then they could claim the tax credit, right?
Yes because the parents are still the ones paying. It makes no difference how the grandma gave the mom money. If mom pays, mom claims.
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Old 11-16-2017, 07:52 AM
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The way I feel about it:

It isn't my job to police their deductions. I give a receipt that says something like this:


Received $XXX payment for care of Susie DCK on 11/16/17.

Leigh

Super simple, and what they do with it after I give it to them is not my concern. I don't even bother to put the payer's name on it.
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Old 11-16-2017, 10:27 AM
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Originally Posted by Leigh View Post
The way I feel about it:

It isn't my job to police their deductions. I give a receipt that says something like this:


Received $XXX payment for care of Susie DCK on 11/16/17.

Leigh

Super simple, and what they do with it after I give it to them is not my concern. I don't even bother to put the payer's name on it.
Right, that's what I typically do, on my letterhead, kids name and DOB and total paid.

I don't separate for divorced parents, and honestly this is the first time this has ever happened where someone wants to pay as a gift.

It's an entire month, too. Not a small amount.
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Old 11-21-2017, 10:15 AM
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Default child care tax credit

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Originally Posted by AmyKidsCo View Post
However, if the grandma had written the check to the parent and the parent paid then they could claim the tax credit, right?
Yes. But the provider won't know if this happened or not, and should still give the receipt to those that paid her.
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Old 11-21-2017, 10:18 AM
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I already printed the parents an invoice for the year of what they paid (they are now paid up until 1/1) and gave the grandparents a receipt for what they paid.

It won't hurt the parent because it still falls under the child care credit anyway.
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