Daycare tax receipts: what a year-end childcare receipt needs to include

Every January and February, parents ask their childcare provider for a receipt to claim childcare costs on their taxes. Here's what that receipt needs to show in the US and Canada, so it works the first time and parents don't come back asking for a corrected one.

Why parents need it

In the United States, parents claim the Child and Dependent Care Credit on IRS Form 2441, or exclude employer dependent-care benefits from income. To do that, they must report each care provider's name, address and taxpayer identification number.

In Canada, parents claim the child care expenses deduction on line 21400 of their return, using Form T778. The CRA expects a receipt that identifies the provider. When the provider is an individual, that includes their Social Insurance Number.

What to include on every receipt

• Your name as the provider, or your business name, and your address
• Your tax identification number:
  • US: your Social Security number or your EIN
  • Canada: your SIN if you're an individual, or your business number
• The parent's name: the person who paid, since that's who claims it
• The child's name, and their date of birth if your form has room
• The period of care, such as January 1 to December 31, 2026
• The total amount paid for that period
• Date issued and your signature

Show the amount the family actually paid in the year, not the amount you invoiced. If December's fees were paid in January, they belong on next year's receipt. Leave out anything the family didn't pay themselves, such as subsidy amounts paid directly to you.

US providers: Form W-10 and your EIN

Some parents will hand you an IRS Form W-10 ("Dependent Care Provider's Identification and Certification"). It's simply the IRS's standard way for a parent to collect your name, address and TIN. The parent keeps it, so it isn't sent to the IRS. A receipt or letterhead invoice showing the same details is also acceptable proof for the parent.

If you'd rather not put your Social Security number on paperwork for every family, sole proprietors can get a free Employer Identification Number (EIN) from the IRS and use that instead.

Canadian providers: the SIN question

Home providers often feel uneasy writing their SIN on receipts, but for individual providers it's how parents' claims get accepted. Claims without it may be denied. Payments you receive are self-employment income that you report on your own return. If you operate as a registered business, you can use your business number.

Quebec has its own system: provincial childcare credits there use the RL-24 slip. Check Revenu Québec's current guidance if you provide care in Quebec.

Timing tips

• Hand out receipts in early January, before families ask. It's one of the easiest ways to look professional.
• Keep a copy of every receipt you issue. Your totals should match the income you report.
• Families who left mid-year still need a receipt for the months they paid.
• Mention in your parent handbook that you issue year-end receipts and when.

This page is general information, not tax advice. Rules change, so confirm current requirements with the IRS, the CRA, Revenu Québec or a tax professional.