Do Daycares Have to Provide Tax Forms?

Understanding how childcare expenses translate into potential tax benefits, such as credits or deductions, requires accurate information from your childcare provider. Obtaining this documentation is a necessary step to properly report these expenses on your annual tax return.

Required Information for Tax Purposes

To claim childcare-related tax benefits, parents need specific details from their daycare provider. This includes the provider’s full name, address, and their taxpayer identification number (TIN). The TIN can be an Employer Identification Number (EIN) for businesses or a Social Security Number (SSN) for individual care providers. The total amount paid to the provider for childcare services during the tax year is also needed.

This information is essential for accurately completing Form 2441, “Child and Dependent Care Expenses,” which is filed with your federal income tax return. This form is used to calculate the Child and Dependent Care Credit, a federal tax benefit designed to help offset the costs of care for a qualifying child under age 13 or a dependent unable to care for themselves, so that you can work or look for work. Form 2441 is the primary vehicle for claiming the Child and Dependent Care Credit.

Daycare’s Obligation to Provide Information

Childcare providers have a specific obligation to furnish tax information to parents. If a parent pays $600 or more to a childcare provider within a calendar year, the provider is required to provide a statement containing their name, address, and taxpayer identification number (TIN) by January 31 of the following year. This requirement applies to various types of providers, including formal daycare centers and individual caregivers.

As long as the statement includes all the necessary details, it fulfills their obligation. This requirement ensures that parents have the documentation needed to claim tax benefits and supports the IRS’s ability to track childcare expenses for compliance purposes.

How to Obtain Necessary Tax Information

Parents should proactively request the required tax information from their childcare provider well before tax season, ideally by the end of January. Many established daycare centers provide this information automatically in a year-end statement.

If a provider is unwilling or unable to furnish a formal statement or Form W-10, parents can still claim the credit. It is important to maintain thorough records of payments, such as receipts, canceled checks, or bank and credit card statements. If the provider’s TIN cannot be obtained despite reasonable efforts, parents should document their attempts. On Form 2441, parents can enter the provider’s name and address and note “See Attached Statement” for the missing TIN, then include a written explanation of their due diligence efforts.