Carol,
A parent asked me for our tax ID number to give to her accountant for listing our tuition as a childcare expense. Is this common practice? Is it the EIN that she’s asking for? Should I give it to the accountant directly? We are 501(c)(3) state-registered corporation.
–Lisa C
Lisa,
The parent is asking for your EIN (Employer Identification Number), but the tuition and fees she pays to your homeschool program are (probably) not tax deductible.
IRS Pub 503 Child and Dependent Care expenses make it clear that tuition/education expenses are not child care and are not tax deductible.
Expenses to attend kindergarten or a higher grade are not expenses for care. Do not use these expenses to figure your credit.
However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be expenses for care.
Summer school and tutoring programs are not for care.
If the child was in preschool at your co-op, then, maybe, the portion for the child’s preschool expenses could be childcare. By the way you may need to check your state laws to see if you are required to be licensed as a daycare.
But the child car tax deduction is only allowed for the parent to work. Was this mom going to work while her preschool daughter was at co-op? If yes, then it’s childcare; if no, then it’s not childcare and not eligible for a tax deduction.
I recommend that you not give her your EIN and explain that her tuition and fees to your homeschool organization are not child care expenses and not tax deductible.
In reality, she could find your EIN on the internet if she knew where to look, but it’s more important that you explain that tuition and fees are not tax deductible child care expenses.
Carol Topp, CPA
HomeschoolCPA.com
HI Carol,
Thank you so much for your blog! If a homeschool academy has a before and after school enrichment program, would that qualify for the child care tax credit?
The qualifications for child care tax credit are found here:Ten Things to Know About the Child and Dependent Care Credit
One important provision is that the care must have been provided so the parent – and their spouse if they are married filing jointly – could work or look for work.
It’s important to note that the burden of proof of eligibility to claim the tax credit is on the taxpayer, not on the care provider.
Hi Carol,
Related Question:
My children attend a homeschool group one day a week so I can work. The program issues no credits and makes no educational claims, though their day is made up of somewhat educational activities.
The website specifically says there are no grades and this is their purpose:
“to contribute positively to each student’s education. Our goal is to provide an occasion to scholastically and socially encourage each student while offering a constructive, fun, educational experience for students as well as giving parents a day “off…does not provide foundational education, but offers educational enrichment, social interaction, and extra-curricular activities in a classroom setting”
Is there a possibility I can use the Child and Dependent Care credit for this?
Thanks for any advice!
The homeschool program’s expenses are clearly educational expenses and not childcare expenses. They are not eligible for the childcare tax credit.