Dependent care FSA receipts and Form W-10 requests

Why parents ask for a W-10

Working parents can get tax help with child care in two ways: the child and dependent care credit on Form 2441, or tax-free money from an employer dependent care benefit plan, often called a dependent care FSA. Both are explained in IRS Publication 503. Form 2441 is also where parents report dependent care benefits, so either way they need your details.

The plan limits, credit rates, and eligibility rules are the parent's issue and can change with tax law. Your job is simple: give accurate information and accurate receipts.

Filling out Form W-10

Form W-10, Dependent Care Provider's Identification and Certification is how a parent requests your information. According to the W-10 and the Form 2441 instructions:

• You provide your name, address, and taxpayer identification number (TIN). For an individual that's a Social Security number or ITIN; an organization uses an EIN.
• The parent keeps the W-10. It is not sent to the IRS.
• Instead of a W-10, a parent may rely on other proof such as a recently printed letterhead or invoice showing your name, address, and TIN.
• Section 6109 requires dependent care providers to give a valid TIN. A provider who doesn't may face a penalty unless there's reasonable cause.
• If a provider refuses, the parent reports that on Form 2441 with a statement explaining it. That's an awkward spot for a family you care for.

Receipts for dependent care FSA claims

FSA claims run on the plan's schedule, not the tax calendar. A parent may ask for a receipt every month or quarter to get reimbursed. Each plan administrator sets its own claim forms and documentation rules, so ask the parent what their plan needs. Some plans ask the provider to sign the plan's own form.

A clear receipt usually shows:

1. Your business name, address, and TIN (matching your W-10).
2. The parent's name and the child's name.
3. The dates of care the payment covers.
4. The amount paid and the date you received it.
5. Your signature and the date.

Keep receipts factual. Don't tell parents an expense "qualifies" for their FSA or credit; that depends on their situation and their plan.

Write each family's exact amounts on its own receipt. Don't round, and don't combine families. The totals parents claim should match the income you report on your Schedule C.

What Form 2441 asks about you

Part I of Form 2441 lists each care provider's name, address, TIN, and the amount paid. Those numbers come from you, so the totals on your year-end statements should match your FSA receipts for the same family and year. Our year-end tuition statements guide walks through the January statement in detail.

Parents report your TIN, and you report the same tuition as income on Schedule C. If the numbers disagree, both sides can get questions. Reconcile first:

• Add up each family's FSA receipts and compare them to your income log.
• Report by the date payment was received. Watch December prepayments and late January payments.
• Keep copies of every receipt and W-10 you sign with your audit records.

A simple routine

• Hand every family a completed W-10 at enrollment.
• Use one receipt template for FSA claims and the same fields on the year-end statement.
• Ask each family at enrollment whether they use a dependent care FSA and how often they file claims.
• Send year-end statements by late January, when families start filing.

Frequently asked questions

Do I have to give parents my Social Security number?

You must give a valid TIN. For an individual that's an SSN or ITIN. Many sole proprietors get a free EIN from the IRS to give families instead; check with your tax professional.

Is Form W-10 filed with the IRS?

No. The parent keeps the completed Form W-10 with their records. It is not sent to the IRS.

What should a dependent care FSA receipt show?

Your name, address and TIN, the parent and child names, the dates of care, the amount paid and date received, and your signature. The parent's plan may require its own form.

What happens if a provider won't give a TIN?

The parent explains the refusal in a statement with Form 2441, and the provider may face a penalty under section 6109 unless there is reasonable cause.