The child and dependent care tax credit offered by the Internal Revenue Service makes accurate record-keeping important for parents who qualify. They can claim a tax credit for a percentage of up to $3,000 of what they pay you, the child care provider, for each child up to two children. By offering them daily, weekly or monthly receipts, as well as total receipts at year’s end, you can protect yourself if a parent claims an amount that does not match what you received.
Write your name at the top of any piece of paper. To achieve a bit more professionalism, you can create a letterhead on your computer, captioning it with your name, your business name if you use one, your address and your telephone number.
Place the parent’s name beneath your own, or enter it as the first line on the page if you’re using a letterhead. You can also include the parent’s address and the child's name in parentheses beneath that. For example, under the address, write “Parent of Bobby Jones” or “Child: Bobby Jones.”
List the details of your financial transaction beneath the paragraph identifying your customer and the child you care for. This should include the amount you received and how the parent paid you, by cash or by check. If the parent paid you by check, include the check number. Write the amount the parent paid you twice, once numerically and once spelled out in words, so there’s no doubt regarding the transaction. For example, write “$200/two hundred dollars.”
Specify the dates when you cared for the child and for which the parent is paying you. Place this information beneath the details of the financial transaction. You can either itemize each date or, if you care for the child on a regular basis, you can write “Week of June 5 through June 12,” then add the year.
Add signature and date lines for both yourself and the parent at the bottom of the page. Have the parent sign each receipt, acknowledging how much money you received.
You can use IRS form W-10 for a year’s end receipt. Make a notation at the top for the total amount you received and return a copy to the parent. Technically, parents are supposed to provide you with form W-10s at the end of the tax year. Parents are not required to file these forms with their tax returns, however, so many parents will neglect to do this. In lieu of a form W-10 for your records, you can create the same sort of receipt as you did for daily, weekly or monthly services. Instead of including individual dates, you can write “For tax year” and insert the year, then write the total amount paid to you all year. Give one copy to the parent and attach your own copy to your copies of all the individual receipts you gave the parent.
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