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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 07-06-2011, 10:50 AM
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actaktmdt actaktmdt is offline Member
Join Date: Feb 2010
Location: Michigan
Posts: 139
Default What Is The Best Way To Deal With DHS And Copays?

What is the best way from a tax standpoint to handle dhs payment and copays. Two of my 4 families with another going to turn in a request to see if they qualify are paying via dhs. One parent wants to pay and then be reimbursed back, the other is simply having the state pay and then she makes up the difference later.

I would really like to streamline this across the board if I can. My concern is the reimbursements and proving should an audit occur. As you would see money coming in and out every two weeks in the amount of about $400. Ideas thoughts please?
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Old 07-06-2011, 08:27 PM
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victorial victorial is offline
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Join Date: Jun 2011
Location: Ohio
Posts: 13

In Ohio if the client qualifies for subsidized care and has a current approval letter, we are not allowed to collect more than their copayment. When I get a new client who thinks they qualify I use the charts provided by the state to figure what the copayment will be and charge that. As long as all their paperwork gets turned in on time I will recieve the reimbursement for the care.

Getting paid a big lump sum only once a month (IF all your paperwork makes it in on time with NO errors) is one of the biggest drawbacks with the voucher system in Ohio. They are currently in the process of installing a swipe card system that will eliminate our need for the tedious paperwork and make it easy to pay us more frequently than once per month.

You should be able to figure out what the copay will be and charge that. I collect the entire copay the first day of the month the client comes. I don't know about Michigan but in Ohio we get the remainder of the funds for the month about 3 weeks into the next month.
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Old 07-07-2011, 08:42 AM
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KEG123 KEG123 is offline
Where Children Grow
Join Date: Nov 2010
Location: Illinois
Posts: 1,254

My family only has a small co-pay that they pay in cash. The state mails me a check around the mid to end of the FOLLOWING month. So like, for May, I didn't get my check until maybe the 15th of June. It sucks. But I really like this family, and they were my first so I do it.
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Old 07-07-2011, 10:14 AM
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TomCopeland TomCopeland is offline
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Join Date: Jun 2010
Location: St. Paul, Minnesota
Posts: 2,972
Default copays

There is no one way to handle this. You need to have records showing when you received money and when you reimbursed a parent. As long as your records indicate the coming and going of the money, you will be fine in an audit.
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co-pay, dhs, subsidy issues

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