Can a Daycare Legally Withhold Tax Information on Your Child?
As a parent, sending your child to a daycare is a big decision. Finding a trustworthy and reliable facility is crucial, especially when it comes to transparency regarding sensitive information. One such information is your child’s tax documentation. As a responsible citizen, you must file your taxes correctly, and part of that includes including your dependents’ information. Therefore, if you trust a daycare facility enough to let them take care of your child, it is understandable that you may expect that they will provide the necessary information required to complete your tax filings. However, what if the daycare refuses to release this information? This article seeks to explore the legality of a daycare withholding tax information.
Why Daycare Centers Need to Collect Tax Information
Whenever you sign up your child with a daycare facility, you will be required to fill out a considerable amount of paperwork. Some of the most critical forms will be the ones that require your child’s details such as their full name, address, and date of birth. Additionally, you may be asked to provide other information such as your own social security number and tax ID. This information is necessary for the daycare center to help you claim potential tax credits related to childcare expenses that you incur when you pay them for your child’s care. The daycare center then has to produce its tax statements detailing the revenue they receive from providing care services to your child, which they file with the tax authorities. Therefore, withholding tax information on your child can be tantamount to noncompliance and potentially expose the daycare center and you to legal issues.
How Daycare Centers Collect Tax Information
Daycare centers use tax forms such as the W-10 form to request your child’s details. As a parent, you will be required to provide your child’s full name, address, and social security number. If your child does not have an SSN, the daycare will require you to obtain an Individual Taxpayer Identification Number (ITIN) from the IRS. In most cases, the daycare center’s tax specialist or CPA will guide you on how to obtain an ITIN. Once your child’s information is collected, the daycare center will provide you with an annual statement detailing the care expenses you incurred throughout the year. You can then take this statement to your tax preparer to claim related childcare credits.
Can a Daycare Legally Withhold Tax Information?
The answer to this question is NO. If you have paid for your child’s care at a daycare facility, you are entitled to receive a statement detailing the expenses you incurred throughout the year. Therefore, if the daycare center refuses to provide you with this statement or any other tax information related to your child, it is not complying with tax regulations. Such noncompliance could expose the facility to legal issues that could harm its reputation.
Conclusion
Parents are entitled to receive the tax information related to their child’s care expenses from the daycare center. Any withholding of this information is not legal and could indicate noncompliance that could have legal implications. It is therefore essential for daycare facilities to maintain transparency to avoid such complications. As a parent, you need to understand your right to this information and demand it if the daycare center tries to withhold it. Tax information is crucial when it comes to filing your taxes, and you must have all the critical information needed to do so correctly.
