How do we claim day care on our taxes?

Taxes and paying for child care.?

• My wife and I both work and we recently had a little girl. Until recently, we have had the luck of family helping watch our little one. This past month situations have changed and we tried a local daycare, but was less than impressed with the quality of care provided. We have been lucky that our friends\co-workers have been able to help out a few days a week. Okay here's the question. We have been giving $25 a day when they have been watching our little one. It's what we were charged per day at the daycare. I read how we can get a little credit, I know it's not much but every bit helps. How do we claim for our taxes? I mean it's $ 50 a week, but most of the time it's someone different each day. We've paid out about $ 800 between 5 people and it's been great being able to trust them. Is it not even worth claiming? I've paid in cash and check.. do you have to turn in receipts\cancelled checks? They are providing care in their home? Do I have to hold taxes on them.. just curious.. any help would be appreciated.

• Answer:

  In order to take the credit you have to provide the IRS with the SSN and address of every provider and they will be checked to be sure they claimed it. For the whopping 20% credit you might receive depending on your income I would not insult my Friends and coworkers who are willing to provide quality care. While true everyone is suppose to claim all income this is diminutive as the IRS defines it, meaning it did not change their lifestyle so they will not be in trouble for not claiming the 100 or so you paid them.