W-10 For Each Parent?

[Meeko]

Tom,

I have a child who's parent's split the custody right down the middle. The child is with each parent half the week and then they trade.
I have never had such an "exact" sharing before.

In the past I have told prospective parents that ONE needs to sign my contract and that ONE pays me....and they work out shared payment between themselves. But is this right to do? That means one of them can't claim the childcare tax credit even though they technically have paid half to their ex.

Should I be taking separate payments and giving two TWO separate W-10's at the end of the year, so they can claim the childcare credit?

[Blackcat31]

IIRC, I think that only one parent can claim the child credit, even if BOTH paid half.

Here is another thread about this where Tom answers: https://www.daycare.com/forum/showthread.php?t=70304

[Meeko]

MY preference is to accept payment from ONE person. But my husband has got me thinking about it.

If parents want to each pay (he one week/her the next) can I legally say no..thus forcing one parent to never be able to claim the credit?

[Meeko]

I understand that both can't claim in the same year. I have heard of parents claiming every other year though.

So do I give one W-10 to one parent every other year, or two W-10's each year showing what they individually paid? Confused!

[Blackcat31]

I understand that both can't claim in the same year. I have heard of parents claiming every other year though.

So do I give one W-10 to one parent every other year, or two W-10's each year showing what they individually paid? Confused!

Do the parents have any type of custody order that dictates who gets to claim the child?

I would give receipts each time either of them paid but I would maybe talk to them about the W-10 and explain that you can only give one of them the form (you don't have to give a total..the receipts should cover that part for them) and see what they say about who is claiming.

I have had families that shared 50-50 custody and payments before and I just had both parents sign the contract, state what weeks were their responsibility financially and then collected payment from each parent on their week and gave a receipt for each payment.

When the end of the year came around, the parents took turns getting the W-10 according to their custody agreement.

Ugh, this stuff is always so confusing. I guess I would ask the parents about it and go from there.

[Laurel]

I would just give whoever pays a receipt and keep track of who pays what and when. Then at the end of the year give them each their total. What they do then is up to them.

You really don't have to give them a W-10 at all. Tom Copeland has this on one of his articles on this site somewhere. I've never given one. If a a parent asks (and not many do), I just type up a little statement that says how much they paid me through the year and my EIN# is on it.

Laurel

[TomCopeland]

parent receipt

Tom,

I have a child who's parent's split the custody right down the middle. The child is with each parent half the week and then they trade.
I have never had such an "exact" sharing before.

In the past I have told prospective parents that ONE needs to sign my contract and that ONE pays me....and they work out shared payment between themselves. But is this right to do? That means one of them can't claim the childcare tax credit even though they technically have paid half to their ex.

Should I be taking separate payments and giving two TWO separate W-10's at the end of the year, so they can claim the childcare credit?

Give your receipt to the parent who paid you. If both parents paid you, and you have records showing how much each parent paid you, give each parent a receipt for what they paid you. If both parents paid you, and you don't have records showing how much each parent paid you, give one parent a receipt for the full amount, and list both parents name on the receipt.

[Meeko]

Thanks Tom!

My food program lady (CMA) came by yesterday and said how much they enjoyed you talking to them here in Utah!