Question

I have a question regarding childcare credit. I make my childcare payments in cash, and my childcare provider doesn't want to report that income. Can I sill claim the childcare tax credit?

Answer

Yes. If you’re eligible to claim the childcare tax credit, you can claim it if the person you paid doesn’t report the income. Report the caregiver’s costs on Form 2441: Child and Dependent Care.

To claim the credit, you’ll provide the caregiver’s:

  • Name
  • Address
  • Taxpayer identification number, which can be a Social Security number (SSN)

If the caregiver doesn’t claim the income, the IRS will likely follow up with both of you regarding the unreported income. If so, the caregiver will have to report the income and might be subject to penalties.

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