Daycare.com Forum
Daycare and Taxes>Parents Left Owing Me Money
DaycareMama 05:04 PM 01-02-2011
If parents left owing me money then come back looking for a year end statement, do I have to give them one? Or can I make them pay me up to date first??
Abigail 06:37 PM 01-02-2011
How long ago did they leave? I would have taken the proper steps to try to get your money from the beginning with giving them a verbal then a written notice and then turn it in to small claims within so-many days. I would not withhold their childcare fees paid in 2010 because they did pay something even though they are not paid up-to-date. This is a good question. I'm not sure if you can mix the two forms together or not.
TomCopeland 10:42 AM 01-03-2011
Parents who want to claim the child care tax credit are supposed to give their caregivers IRS Form W-10 to fill out. Few, if any, parents are doing this. Instead, many providers give the parent a filled out W-10 or give the parent an end-of-year receipt. If you are on good terms with the parent it's a good idea to give the parents a receipt and have them sign it and keep a copy. You can use the W-10 for this purpose if you write the amount they paid you across the top of the form.
If a parent leaves owing you money, however, I would recommend not giving the parent a W-10 and not giving them any end of year receipt until they pay you what they owe you. You are not breaking the law by not giving the parent a W-10 or a receipt. The only time there is a consequence is if the parent gives you a W-10 and you fail to fill it out (the penalty is $50). So, tell the parent no receipt until you receive what's owed you.
If a parent leaves owing you money, however, I would recommend not giving the parent a W-10 and not giving them any end of year receipt until they pay you what they owe you. You are not breaking the law by not giving the parent a W-10 or a receipt. The only time there is a consequence is if the parent gives you a W-10 and you fail to fill it out (the penalty is $50). So, tell the parent no receipt until you receive what's owed you.
Annette 07:22 AM 01-19-2011
If you pay the $50 penalty do you have to give them a receipt for what they paid. I have customer owing $265.
TomCopeland 09:23 AM 01-19-2011
No. If the parent gives you the W-10 and you refuse to fill it out, the IRS could find out and fine you $50. However, this doesn't mean you will be forced to give the parent a receipt for what they paid you. The parent will be able to claim the child care tax credit without your ID# as long as they have made a good faith effort to get your #. Giving a provider the W-10 is an example of a good faith effort, so the parent will get the credit.
Annette 10:08 AM 01-19-2011
The parent already has my tax id. Can they still get a credit without my receipt for what they did pay?