Conference moira::parenting_v3

HERE IS THE NOTE THAT WAS HIDDEN:

This is one of those "What would you do?" notes.

Some background info :  My son is 2 and used to go to a wonderful daycare.
Recently, some changes have been happening at the daycare that we did not
like.  The teachers in the toddler room left the employ of the daycare and
will both be starting work at a new daycare opening next month.  Several of
his playmates left the daycare, too, and will be starting at the new daycare.
I removed my son from the daycare, too, and he too will be starting at the
new center next month.

One of the ex-teachers from his old daycare (toddler room), and one of his 
ex-teachers from the infant room are now "babysitting" my son and 2 other 
children, until the new center opens up.  (The 2 other children are also from 
the old daycare.)  These women are wonderful with the kids and I really like
them.  One of the main reasons I'm sending my child to the new daycare is 
because they will be employed there.

So what's the problem????

Each of the 3 parents are paying them the same amount of money we payed to the
old daycare, and they are splitting the money evenly.  I am in the dependent-
care reimbursement program at DEC, and I need a receipt and their social
security number in order to claim the money for the 4 weeks they are babysitting
my son.  I've been asking since last Wednesday for the receipt and they keep
postponing giving it to me. Finally yesterday they told me they didn't want to
claim this money on their income taxes, so they didn't want to give me their
social security numbers.  One of the other parents is also signed up for a
dependent-care reimbursement at her place of employ, but her company doesn't
require a tax ID or social security number when she files a claim.  I called
John Hancock and they DO require the SS#. I don't want to make any moral 
judgements here, I just want to be able to claim my money.

I think some of my options are :

A. Insist on getting their SS #'s or go to the IRS. (This isn't really an option
   for me.)

B. Offer to pay their taxes on the money.

C. Forget the whole thing, and hope I can make up the difference in the coming
   months at the daycare center. (Because usually I claim an amount that is
   larger than my balance.)

Any other options?  What would you do?

� �ori �

    If I were in your shoes, I would probably pick option C.  It's not
    really like you have alot of options since the situation is short
    term.  What will you do if they say "No" to options A&B, anyways?
    
    The only thing else that you might do is explain to them that you
    will not be able to claim the money that you're paying them if they
    don't claim it and perhaps they'll lower your weekly fee a bit.
    
    Of course, I suppose that it is illegal for them to not claim the
    income but that's not my problem (or yours necessarily).
    
    Good luck.
    Carol

    By the way, Lori, this wouldn't happen to be the same center that 
    Matthew was attending in early 1989, would it?   The one where
    you went through the salmonella problem?   
    
    Just curious,
    Carol

All you have to do is prove you TRIED to get their SS#.  If they do not
provide it, then you can still claim it on your taxes (I don't know what
kind of trouble, if any, they may get into!).  I would go ahead and submit
it to JH with an explanation letter, then claim it on taxes.  Good Luck!

Kristen

RE -.1

>> All you have to do is prove you TRIED to get their SS#.

How can you prove this?

    Just curious... what problems did the moderators have with this note?

    Lori, how can they look you in the eye, after admitting they are
    breaking the law, and refuse to give you a receipt when you have told
    them that as a result of their actions, you are literally losing a 
    significant amount of money? 
    I just can't believe they'd have the nerve to do this. I'd try to be as
    nice as possible since you want to maintain a positive relationship
    with them, but boy, I'd feel really abused if I had to lose my dcra
    funds because they wouldn't "do the right thing". 
    
    I am in the dependent care account program too. I'd be concerned about
    using up your "buffer" funds for this purpose, when you may well need
    them honestly sometime later in the year. ( I just had to use up my
    surplus funds when I got a free month of daycare courtesy of my
    mother-in-law while inbetween daycare providers and am nervous about 
    the lack of future funds.)
    
    Good luck,
    Sandy

RE .6  Because this note dealt with tax evasion, that is why it was
       originally set hidden.

RE .7

I AM angry, and HURT!  At the risk of sounding immodest, I bent over back-
wars for them, because I like them so much.  I've given then dinners at a
very nice restaurant here in town last winter.  And when they said their bank
held my DCU checks for 9 days before the funds were available, I offered to
pay them in cash (which I now do.)  But they are very nice to me...Like I
said before, except for this incident, I felt I had the perfect childcare
givers.  

But after I explained that I could lose that money if I don't claim it,
they just looked at me as IF to say "Sorry...better you than us."  But I 
could tell that my situation bothered them...just not enough I guess.  I
also think that they didn't really believe that I need their SS#'s because
the other parent doesn't to make her claim.

� �ori �

    Perhaps it's something as simple as them not understanding how to
    claim money that isn't posted on a W-2 form???   
    
    Giving them a big benefit-of-the-doubt, carol

    It was my understanding that you could only get the daycare tax
    credit for daycare costs not covered by the reimbursement fund.
    
    I was told by the person who did our taxes that I could get the
    tax credit even without the sitter's ss#. You give the sitter's
    name, and it is left up to the IRS to go after her.
    
    So, for the money that does not get covered by the reimbursement
    fund, get the tax credit for, and give the women's names instead
    of their ss#'s when filing this time.
    
    Good luck.
    
    Dot

    After having 2 nannies and doing it the legitimate route of paying
    their taxes and SS quarterly, I'd personally opt to do it legitimately.
    BUT, your situation is so temporary - 4 weeks. I don't know the
    reimbursement program well but what happens when you go on vacation and
    don't pay the daycare fees. Why can't the program see this as a 4 weeks
    vacation from the program and the daycare? 
    
    If they won't give you the social security numbers to make this
    legitimate, I would not pay the portion that is social security or
    taxes. If they have a problem with that, then you can inform them that
    you are claiming on your taxes that you employed them for 4 weeks and
    they will have to "suffer the consequence" if the IRS comes after them
    because you plan on keeping it legit!!!! I know it's hardball, it just
    depends upon what game you wish to play. Remember, the IRS does not
    take kindly to people avoiding taxes. In this case it is not only the
    daycare providers who will be in trouble, it will be you because you
    have hired someone illegally and did not withdraw and submit their
    taxes and SS.
    
    If you are going to claim them as an employee, expect to get alot of 
    forms from the IRS, spend alot of time filling out forms and then 
    have the IRS tell you you have filled out all the wrong forms and the 
    viscious circle starts!! It may not be worth it for a 4 week period - 
    it depends upon how much you have to lose from the reimbursement program.
    Included on these forms is their SS# so you are already stuck. Not
    providing a SS# means you must have hired someone who does not have
    one (or a green card number), something that should not be done under 
    any circumstances.
    
    Good luck with a difficult situation. I'd look into finding out what
    happens if you take a break from the program first in order to keep
    peace with these ladies (and the kids). 
    
    Andrea

RE -.1

>>    what happens when you go on vacation and
>>    don't pay the daycare fees. Why can't the program see this as a 4 weeks
>>    vacation from the program and the daycare? 

First of all, I haven't seen any daycares (I'm sure they must exist somewhere!)
that allows you to take 4 weeks vacation and not still have to pay them!

Second of all, as far as the reimbursement program goes, there are definitely
risks involved.  The major biggie is "if you don't claim it by the end of the 
year, you lose it".  Period.  They don't want to make it TOO easy for people
to earn tax-free money!  So, if you know ahead of time you are taking a 
4 week vacation, then you would compensate at the beginning of the year by 
having a smaller amount deducted from your paycheck than you normally would.  
Then, each month you'd be claiming more than your account balance.  Over time, 
it would even out and you'd eventually get that money back.  Up to now, the
benefits in tax savings have outweighed the risks.  

I can't claim them as employees...they're really not my employees.  They work
for several parents, at someone else's house. I guess that makes them self-
employeed for those 4 weeks.(?)
    
� �ori �

P.S. I've decided to give up, and not try to make a claim for the money I'm
paying them.  Hopefully, in the next month or two, when I start paying the
daycare, I will get that money back. (Because the daycare fee is $130/wk, and
I have (the max.) $96/wk withheld from my paycheck.)

    
    Whew! Lots of issues here.  I would like to address a few...
    
    RE: .4 and .5
    
    Its true, you just have to try to get their SS number - at least for
    this past tax year.  There is some form you can get from the IRS and
    booklet that describes what info you need to take the child care credit
    (form 2441 - I believe).  Its like a w4 that you can give to your
    day care provider which requests name, address and SS number.
    
    As far as proving you tried they are suppose to sign their names to
    this form.
    
    RE .7
    
    I must be missing something here.  If you got a free month of daycare
    then you should be in no danger of lacking future buffer funds.  If 
    you don't pay for a period of time, then would have an excess of money
    in the account.  If your daycare costs are more than the max you can
    deduct or you have requested being deducted, then you will be able to
    recoup some or all of the excess funds.  If you deduct weekly exactly
    what you need to pay your sitter, then yes, you would loose the funds
    you set aside for those 4 weeks (unless your new sitter is more 
    expensive).
    
    RE .8
    
    I don't believe them when they said that the DCU checks were held for
    9 days!  That's illegal, even if its an out of state check, the max
    hold is something like 3 to 5 days.  This legislation on this was
    just passed in the last year or so. (Wish I could remember the exact
    rules - call DCU about it)
    
    RE .10
    
    You can also take the Child Care Credit as long as the total amount
    of monies you paid out to child care (including the Dependent Care
    amounts) is no more than the max on form 2441 (that's $2400 for one
    child, $4800 for 2 or more).  So, since the Dependent Care max is
    $5000, if you have only one child and you took out of Dependent
    Care account $2400 and you gave your sitter another $400 dollars
    that didn't get reimbursed (because NO Monies were in the account -
    not cause you forfeited them) - too bad - you reached the max child
    care amount allowed on form 2441 - child care credit.  Remember if
    you forfeited the money in the account, you still got a tax break
    from it (it wasn't taxed, so you can't take a double whammy and then
    take a credit on top of it on form 2441)
    
    RE .11
    
    The base noter is not an employer (as she stated). These people are
    considered self-employed.  They are responsible for taxes, SS, etc
    not the people using their services.  If the sitter is working in your
    home, then you are considered the employer and are responsible for not
    only withholding of taxes and SS, but FICA and unemployment as well!
    In this case, I don't believe their is any liability or fault on the
    part of the base noter.  She should try to document that she tried to
    get their SS number and as long as she provides the name and address
    of the provider, she is entitled to the deduction (Of course this is
    a moot point since at $130/week she won't be able to take the child
    care credit and John Hancock won't release the funds without the
    receipts and SS numbers)
    
    RE .12
    
    According to my quick calculations, you should be ok as far as 
    retrieving any monies left in the John Hancock Account that were not
    able to be used during this 4 week period.  During these four weeks
    you will have an extra $384 (96 * 4) that you can't claim.  But over
    the next 13 weeks (oct-dec) you will have incurred expenses of $1690
    dollars and would only have put in (96*13) or $1248.  A difference of
    $442, SO you will use up the extra $384 that is in your account from
    that 4 week period of not being able to claim the expense.
    
    In summary - its not right for them to do what they are attempting to
    do, but in reality, it appears to make no difference in your own
    financial situation.
    
    Sue

re DCU checks being held:

Perhaps they were fishing for cash payment.  It doesn't sound like these
folks believe that tax laws apply to them, and cash payments are easier
to hide than check payments.

RE: -.1

>> DCU checks:
>> Perhaps they were fishing for cash payment.  

No, because they didn't have a problem with the other parents' checks, and
they still pay by check.

    If I were you and I paid them at the end of the week, I would withold
    the last weeks payment unitl I recieved a SS#. I would write them a
    letter to that effect and keep a copy.  I would also tell them that I
    was planning to deduct the money from my taxes.  They sound like
    losers.

    Just thought I would add this footnote:
    
    I am in no way excusing or condoning what the sitters are attempting
    to do.  I think they are wrong.......
    
    I don't know where you are, but in the state of MA you must have
    a license to provide Family Daycare (in the home of the provider).
    Maybe these ladies thought that if they gave you their SS#'s, the
    IRS would check up on them to see if they had a license to practice
    FAmily Daycare......I guess for them it was the lesser of two evils...
    Not having a license or tax evasion....both are wrong.  And a license
    is fairly easy to get in MA...only a $15 fee and an inspection...which
    I am sure they would pass...if they had dangerous situations in
    their homes, I am sure you wouldn't be sending your child there.
    
    I know this doesn't help you in your current situation but, I thought
    it might give you some insight to their motives...right or wrong.
    
    Pam

    No, actually it is quite difficult to get the license (most homes won't
    pass on the first try).  Also, I am not sure that the state *requires*
    licensing.  You are of course required to pay taxes on the money.
    
    Sue

    At one point I was exploring the possibility of open home daycare,
    instead of returning to this world I now enjoy...talking to grownups!!
    I sent to the Office for Children for the info packet.  One of the
    first and most prominent statements in the literature clearly states
    that "anyone who takes care of children not their own, for pay or not
    Is not allowed to do so without a license"!!  My second point, is even
    though you may not be using these ladies in a home daycare situation
    presently, you can still make a complaint to the Office for Children
    (I'm assuming this situation occured in MA) 
    
    I would personally hesitate to have these ladies take care of my child
    give their actions over the past four weeks in their home.  If they are
    trying to hide the money they'r taking in, plus the fact that they're
    breaking the law by not being licensed, I would be really be asking
    myself what will they hide from me about the events of the day with
    regard to the care of my children.  I can only think of a worst case
    scenario?  (Think about that case in Calif, with that daycare center
    where the man (Tookie something?) and his mother were acused of
    kiddy-porn!) It was supposed to be a "good" daycare center!! 
    Personally I'd get as far away from these people as possible.  Kids DO
    flex, and you will certainly find as good, possibly better daycare
    somewhere else!!
    
    LYN
    

    
    Well, this was a long time ago, but LYN, I think you're overdoing the
    comparison there!  I wouldn't compare these people who are trying to
    make some extra bucks by not claiming the child care to someone
    involved in kiddy-porn.
    
    I wonder if the base noter asked them to reduce the amount she pays by
    the amount being saved on taxes!
    
    Chris D.

>    Well, this was a long time ago, but LYN, I think you're overdoing the
>    comparison there!  I wouldn't compare these people who are trying to
>    make some extra bucks by not claiming the child care to someone
>    involved in kiddy-porn.

   At the risk of not getting this right, I'll comment here... I don't
   think that her point was to compare the two groups of people you
   mention.  Instead, I think the point was to say that once they were
   working "outside the law", so to speak, that the potential for
   further, more serious infractions, was greater.

   Does that make sense?
   
   - Tom

>>   Instead, I think the point was to say that once they were
>>   working "outside the law", so to speak, that the potential for
>>   further, more serious infractions, was greater.
    
     Tom, I'm not sure I see the difference.  Why is there a better
    potential?  I know a few people that daycare in their home "under the
    table" and I would trust them much more than a regular daycare.  Even
    my wife did it for awhile when she was between jobs.  Does that mean
    there's more potential for my wife to get involved in kiddy porn than,
    say, your wife who may not have done "under the table" daycare?  That's
    sure what the original note made it sound like to me.  Maybe I'm
    reading something wrong, but I don't see where.
    
    Chris D.
            

    
>     Tom, I'm not sure I see the difference.  Why is there a better
>    potential?  I know a few people that daycare in their home "under the
>    table" and I would trust them much more than a regular daycare.  Even
>    my wife did it for awhile when she was between jobs.  Does that mean
>    there's more potential for my wife to get involved in kiddy porn than,
>    say, your wife who may not have done "under the table" daycare?  That's
>    sure what the original note made it sound like to me.  Maybe I'm
>    reading something wrong, but I don't see where.

   I can't really answer that, Chris.  Maybe Lyn can comment when she
   gets a chance.  
   
   Is there more potential for someone who does one illegal activity
   to partake in another - for most of us here and the people we know,
   probably not, no.  Does driving over the posted speed limit as many
   people do nearly every day mean that we will get into something
   more serious involving cars, like stealing them - of course not.
   However, I suppose if you wanted to try to chose who was more
   trustworthy, that would be a data point to be aware of.
   
   On the other hand, if I were doing something illegal - for example,
   if I were working at a job where I was under age for that job - I
   would probably be less likely to report problems if others around
   me or my employer were doing something illegal too.
   
   < Rule 7 - there is no black and white answer in real life! >
   
   Peace,
   
   - Tom

    Folks, let's steer the conversation toward the topic at hand - how to
    handle daycare providers who request payment "under the table".
    
    I don't feel that a philosophical discussion about lawbreaking is
    appropriate here.  Perhaps that would be more appropriate in another
    notes file.  I don't want to see this go down a rathole.  OK?
    
    Thanks,
    Laura
    co-mod

    
    O.K Laura.  You're the boss!
    
    Chris D.

   Ooooops.  Sorry 'bout that.
   
   - Tom