The Internal Revenue Service allows all corporate and self-employed childcare providers to obtain a federal employer identification number, or EIN, that can be used in place of a Social Security number for business tax filing. As a parent, you'll need this number to claim the child and dependent care tax credit. The best way to get an EIN is to have your childcare provider fill out Form W-10. You can also run an online search in some instances.
Why You Need an EIN
To claim the child and dependent care credit, or to receive benefits under your employer's dependent care plan, you must identify the childcare provider on Form 2441: Child and Dependent Care Expenses. Required information includes the provider's name, address and taxpayer identification number such as her Social Security number or EIN. Be aware that individual, self-employed childcare providers might not have an EIN. As long as you collect the provider's Social Security number, you'll be able to claim childcare tax credits.
Download Form W-10
Form W-10 is a simple information-request form. It asks your childcare provider to provide the basic tax information you need to fill out Form 2441. Start by downloading Form W-10 from the IRS website. Fill out your own name and address in part II, then mail the form to your childcare provider. Your provider is required by law to fill out the form, sign it and return it to you. You don't need to send the signed form to the IRS; just keep a copy with your tax records.
If the Childcare Provider Refuses to Sign
If your childcare provider refuses to sign the W-10, don't worry; you can still claim the child and dependent care tax credit. You simply have to show that you made a good faith effort to get the provider's EIN or Social Security number. The best way to do this is to attach a note to Form 2441 explaining that you sent Form W-10, but the provider refused to fill out the information. The IRS has the option of hitting the provider with a $50 penalty for not filling out the form and auditing the provider if it suspects that she is committing tax fraud.
Search Online
FEINsearch.com is a database of federal EIN numbers. You enter the name and address of the childcare provider you are looking for, and the system should return the EIN of the provider who matches your search criteria. You can get up to five searches for free. Take care when using FEINsearch, however. While the site is useful for locating the EINs of large corporate providers, the database is not comprehensive, and running a search will not show the IRS that you have made a good faith effort to get your childcare provider's EIN.
A Note About Tax-exempt Chilcare Providers
If your childcare provider is tax exempt, you don't need his EIN. However, you should still give the provider Form W-10 and simply write "exempt" where the form asks for the taxpayer's ID number. Generally, an exempt provider is one organized and operated exclusively for religious, charitable or educational purposes, or for the prevention of cruelty to children.
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Writer Bio
A former corporate real estate lawyer, Jayne Thompson writes about law, business and personal finance, drawing on 17 years’ experience in the legal sector. She holds a Bachelor of Laws from the University of Birmingham and a Masters in International Law from the University of East London. Her work has appeared on numerous legal blogs including Quittance, Upcounsel and Medical Negligence Experts. Find her at www.whiterosecopywriting.com.
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