1099 Issuance

[Taxman VA]

Client of mines pays an individual for child care of her son. The individual getting paid and performing the service asked her for a 1099.

Is she required to issue? Yes amt > $ 600.

[MilTaxEA]

Client of mines pays an individual for child care of her son. The individual getting paid and performing the service asked her for a 1099.

Is she required to issue? Yes amt > $ 600.

Doesn't sound like a business expense to me...

However, is this person a Household Employee?

[taxea]

No the child care person is confused. If your client pays this as an employee benefit out of a business fund and takes it as a business expense then she would have to issue a 1099. Otherwise, if it is out of personal funds then she is not required to issue a 1099 for the service.

Perhaps the child care person actually wants your clients SSN because she should be providing your client with her name, address, phone, amount/s paid thru the year for each child and her SSN/EIN or State license #.

[Taxman VA]

Response

[QUOTE=MilTaxEA;131062]Doesn't sound like a business expense to me... I agree!!!

However, is this person a Household Employee? No- she just comes over to watch the child more like baby sitting. My thinking is when claiming the child care credit this person's information is in the tax return so she has to report it as income on hers. Their should be a cross check involved but I don't think IRS is that far involved. I did check the regs and baby sitting services do fall under qualified expenses.

Thanks,


Taxman VA

[Taxman VA]

Response to taxea

Thanks for the reply as I checked and baby sitting does fall under qualified expenses. The taxpayer (has the child in need of care) does need to get the appropriate inf from provider (Name/SSN/address) to be able to give to me so Form 2441 can be completed.

This person providing the care does not have a business so 1099 isn't required, as you mention it is personal funds paid so she can work as her husband also works outside the home.

Best Regards,



Doug

[Lion]

Household Employer

Your client still might be a household employer if she has an employee come to her home to care for her children while she and her husband work. Then, she'd issue a W-2 and should've received a W-4 among other paperwork. If the sitter is truly an independent contractor, then your client should've gotten a W-9 (actually is there a form more specific to child care agencies, W-10 or something?) from her but does not have to issue a 1099 for personal expenses.

[jimenright]

It could be

Client of mines pays an individual for child care of her son. The individual getting paid and performing the service asked her for a 1099.

Is she required to issue? Yes amt > $ 600.

that the babysitter plans on getting an EITC and wants the 1099 to document her income.

[Gary2]

This person providing the care does not have a business so 1099 isn't required, as you mention it is personal funds paid so she can work as her husband also works outside the home.

Too many pronouns.

The fact that the person providing the care doesn't have a business has nothing to do with the 1099 requirement. The fact that it's a personal expense for the parent is the reason that no 1099 is required to be issued. That the parent and her husband both work is one of the qualifications for the dependent care credit - which is a different issue from the 1099 question.

[S T]

1099 Requirement

I do not believe there is one for the Parents (Etc) to report to the Provider.

If the Child Care Provider is asking - not sure, usually the other way around for the Tax client to ask to obtain Child Dependent Care Credits.

If, not a Household Employee as Lion pointed out, Child Care Provider only needs to report on Schedule C - or - other appropriate schedule for them, and that should suffice for the "Provider" Tax Reporting

If in fact a Household Employee then a W-2 needs to be issued and the appropriate Federal withholdings and taxes reported on Sched H via the 1040 form.

Sandy

[BP.]

that the babysitter plans on getting an EITC and wants the 1099 to document her income.

Exactly! Probably has a thorough tax preparer doing due diligence on the child care income, and asking for income documentation.

[taxmom34]

there is a minimum amount that has to be paid to household employee in order to issue a W2. original post said $600 so , no W2 required?

[Lion]

No Minimum

There is no minimum amount to issue a W-2. And, the OP said more than $600 anyway.

(There is a minimum amount that requires a 1099, but 1099s may be sent for less.)

[BOB W]

My understanding is, if the services are provided in your home it is a household employee and W-2 is required. If the services are at the providers location no 1099 is required, but the provider is required to provide full info so that 2441 can be completed.

[taxmom34]

i was thinking of the nanny tax, where you need to file schedule H and issue W2 to the babysitter. tax book 14-1 does mention $1700 plus to issue those forms . OP just said $600 which is why i was thinking that there had to be more income in order to use the H & W2.

[appelman]

1700 is indeed 2011 threshold for houehold employee.

And income tax withholding not required, so no W4 needed. But in this case, why not give her the 1099 as a courtesy? You wouldn't even have to file it, but an online service will do it all for you for all of $3 a pop.