Assisdant Daycare provider

[Unregistered]

Hello all. My wife operates a daycare out of our home in MA. Her mother is getting ready to retire and has obtained her certification to be an assisdant provider, which allows my wife to take 2 more children. My question is with taxes. My wife has heard that she would need to claim her mom as an employee and hence pay payroll taxes, which would be counter productive and end up costing us money. I was under the impression that her mom would be more of a subcontractor and be paid and given a 1099 at the end of the year.

I checked the IRS website and it all seems to your interpretation on weather she would be an employee or contractor. If anyone has any experience with this I would appreciate your input. thank you.

[lilbiddapopcorn]

Sounds like one for a tax professional but...

I would call around to the IRS itself or maybe even places like H&R block or your own tax professional to be sure but I know that my mother in law owns a business and employs a few people at a time and she hires them as private contractors so she can avoid the fees and such from the IRS because like you said, it costs more than it's worth. I don't know if it's the same for daycares but it's worth looking into. I honestly would suggest getting your information from someone with more tax expertise though because i'm sure you don't want to do it one way and have a big surprise at the end of the tax year! Wish I could help more.

[mac60]

I don't know if this helps, but I worked as an "outside contractor" for a home health store for 1 year, and they paid me a straight wage of $9 per hour, and I had to pay my own taxes out of it at tax time. I just received a statement at the end of the year that told my total pay for the year from them.

[Rockwellmom]

assistant provider

Hi there,

You only need a 1099. You can get the forms from staples, office max or any other office supply store.

Best of Luck to you,

Love Bug Child Care

[Unregistered]

Employee or Independent Contractor

There is an excellent book by Tom Copeland, an attorney specializing in Family Childcare, called the "Family Childcare Record Keeing Guide" that covers all Tax related questions invloving in-home childcare including a whole section on this.The IRS examines 3 factors to determine if an assistant is an employee or an independent contractor.
1)Behavioral Control
2)Financial Control
3)Relationship of Parties
He goes into detail about what each of these mean and how the IRS interprets them. Ultimately his analysis is that virtually anyone you pay to care for the children no matter how often or little they work would be considered an employee by the IRS. His book is a great resource to have on hand.