Childcare Tax Credit Question?
Answer:
The short answer is if she take the credit you need to claim the income. In order for her to claim the income she has to provide the IRS your SS number. Then they do a check to see if you have claimed the income. But remember that you are able to take the normal business expenses associated with the babysitting.
If she claims the child care on her income tax...and you don't there could be trouble. You need to claim it as income if she is claiming the child care expense. You will need to give her a receipt to claim...so you will need to claim it as income.
If she's claiming it and you aren't - you CAN get in trouble. It's income and legally has to be reported.
Yes.. she has the right to claim the expense.. and if she does.. you have to claim the income.. you will most definitely get in trouble if you don't..
Unfortunately, if you are earning income for watching her child... then yes, you have to claim it as income.
If she is paying you "under the table", meaning with straight cash, then you might be able to get away with it. If she is collecting any daycare subsidy through th egovernment... then I would be claiming that as income.
In order for your cousin to claim the childcare expense on her taxes, she will need receipts from you. If you write her these receipts, then you have to declare it as income. Unfortunately in this case it's either all or nothing, there is no other way about it. I hope this helps and good luck!
She can claim the childcare expenses on her income tax if she provides the IRS with your name and social security number. The IRS can then use that infomation to check to see if you claimed that income (you are supposed to claim it)
The answers post by the user, for information only, FeelBaby.com does not guarantee the right.