Not Licensed - Do I qualify?

[Unregistered]

I am not licensed, but have an in-home daycare for 5 children I. have a business license in my city. Can I claim all the same deductions as a licensed provider (food, t/s%, etc.)

[Michael]

What state do you reside in? Does your state allow for unlicensed care?

[TomCopeland]

Not Licensed

As long as you are not in violation of your state child care licensing law, you can claim the same deductions as licensed providers. If you are in violation, then you can't claim house expenses, but you can claim all other expenses.

[llove530]

What do you mean by house expenses? Can you provide examples?

[TomCopeland]

Not licensed

House expenses include: property taxes, mortgage interest, house insurance, utilities, house repairs and house depreciation

[llove530]

What if you only claim what your state legally allows you but still keep more children?

[TomCopeland]

Not Licensed

If you are caring for more children than state law allows you cannot claim any of your house expenses as a business expense. It doesn't have anything to do with how many children you claim. Being out of compliance with state child care laws also exposes you to additional liability if a child is injured.

[llove530]

I have a friend that does this. How would anyone know if she is paid in cash ?

[TomCopeland]

Not Licensed

Some people do cheat on their taxes. The IRS might find out about this if: the parents claim the child care tax credit and the provider is caring for more than 6 children (parent not allowed to claim credit in this situation); a child is injured; licensing finds about the person; another provider turns in the person to the IRS.