State Taxes Requiring Paperwork For Cash Payments

[Country Kids]

Is anyone else's state requiring extra paper work from you for clients that pay with cash?

I guess our state is mailing out forms that we need to fill out and return but only for clients pay their bills with cash.

Haven't received one yet but sounds like it's not fun! I saw a provider ask if anyone is charging the clients for the extra work because it takes awhile to fill out.

[daycarediva]

For subsidy copays?

If not, the state has NO business in my cash payments. I would say no.

[Country Kids]

This is for your state taxes you pay.

So anyone that pays you cash-state or private pay, my state not sure about others are now double checking records is my understanding.

[daycarediva]

That's frigging nuts.

How are they going to keep records of this? It will just make people say "what cash?"

[Country Kids]

That's frigging nuts.

How are they going to keep records of this? It will just make people say "what cash?"

Hopefully you will have receipts of the payments they made. I know I have an option on my program to hit cash payment and then the amount.

When I do a print out for parents at the end of the year it shows if payments were by check or cash.

I'm just dreading the paperwork it sounds like we have to do to show we were paid.

[Blackcat31]

Who is asking for this info?
Your state, licensing or the IRS?

I’ve never heard of such a thing...

I have parents that sometimes pay in cash and of course I claim all my income but the parent that pays in cash also gets a receipt so they can prove payment/expense on their end.

I’ve never been asked by anyone to provide proof of cash payments.

[Country Kids]

Who is asking for this info?
Your state, licensing or the IRS?

I’ve never heard of such a thing...

I have parents that sometimes pay in cash and of course I claim all my income but the parent that pays in cash also gets a receipt so they can prove payment/expense on their end.

I’ve never been asked by anyone to provide proof of cash payments.

From what I'm understanding it's not the IRS but the State portion of our taxes.

Maybe in a bit I will see pop over to the tax area and see if Tom can answer why they are doing this.

[Blackcat31]

From what I'm understanding it's not the IRS but the State portion of our taxes.

Maybe in a bit I will see pop over to the tax area and see if Tom can answer why they are doing this.

If it’s your state he may not know...

I’d pop back over to the site you saw it posted on and ask provider who posted for more details

I would not fill anything out unless it’s accompanied by the law showing where it says I’m required to do so or unless it’s part of an audit.

I’ve been asked to verify cash payments for a family that was being audited but they brought me a form to fill out that was provided to them. The family says the audit is because of some changes to the child tax credit (:confused
Wonder if that is what the provider that posted is talking about.

[Country Kids]

If it’s your state he may not know...

I’d pop back over to the site you saw it posted on and ask provider who posted for more details

I would not fill anything out unless it’s accompanied by the law showing where it says I’m required to do so or unless it’s part of an audit.

I’ve been asked to verify cash payments for a family that was being audited but they brought me a form to fill out that was provided to them. The family says the audit is because of some changes to the child tax credit (:confused
Wonder if that is what the provider that posted is talking about.

I have had to fill one of those out also (last fall) and it doesn't sound like that is what they are talking about. It seems to only be for clients who have paid cash.

One of my clients even was told by her tax preparer that so many childcares are getting "audited" this year by the State tax area. Her preparer said it has been a pain and causing lots of confusion.

[storybookending]

I have never heard of this. I have one family that pays exclusively in cash and then the others might occasionally, like one or two weeks out of the whole year. I just keep track and report all income. The guy that does my taxes has never even asked how I am paid. Just for a total payments received. He doesn’t even care what family paid what amounts, just my end of the year total combined.

[tenderhearts]

I had a family for the first time last year need information for I believe the childcare credit. I can't remember the form from the state but it didn't have anything to do with cash payments but I had to send in dates child was enrolled (which they still were), their rate, usual times in care and copies of all payments, it was ridiculous. I called the state and they said they are "randomly" selected. In all my 20 yrs of this NEVER had to do anything like that. Then this year another family brought this to me, she said they have been "selected" at least 3 yrs from my understanding, however, she had a form this time and only had me fill that out, it did say on there that I had to send payments log but she said they never did that before and it wasn't questioned so I didn't.
I'm in Oregon, it's a total pain and I think it's ridiculous the state has providers fill all that out, I already give them an end of year statement.

[Country Kids]

I had a family for the first time last year need information for I believe the childcare credit. I can't remember the form from the state but it didn't have anything to do with cash payments but I had to send in dates child was enrolled (which they still were), their rate, usual times in care and copies of all payments, it was ridiculous. I called the state and they said they are "randomly" selected. In all my 20 yrs of this NEVER had to do anything like that. Then this year another family brought this to me, she said they have been "selected" at least 3 yrs from my understanding, however, she had a form this time and only had me fill that out, it did say on there that I had to send payments log but she said they never did that before and it wasn't questioned so I didn't.
I'm in Oregon, it's a total pain and I think it's ridiculous the state has providers fill all that out, I already give them an end of year statement.

Yes, same state and I can't tell you the number of providers having to do this, this year. There is a facebook site for providers across the state and that is how I found out about it! It only seems to be from parents that are paying cash.

I had a client last fall need one filled out for 2016 Luckily I had everything at the touch of a button but she said they have been flagged and they could be for like 5 years:confused: They were also a cash paying client.

[hwichlaz]

It sounds like the person posting that is being audited to me. And that you should make sure to keep good books so that you can show your record of cash receipts if you get audited, which we should all do anyway.

[hwichlaz]

Ohhhhh, so it’s the PARENTS that need the proof. That makes more sense. They are bearing extra scrutiny for some reason, maybe a red flag in their tax return, and the state wants to be sure of their deductions.

[Country Kids]

Ohhhhh, so it’s the PARENTS that need the proof. That makes more sense. They are bearing extra scrutiny for some reason, maybe a red flag in their tax return, and the state wants to be sure of their deductions.

What's strange though is so many providers are having to deal with this. I have done this for almost 20 years and never have had this happen.

Now all of a sudden I have 1 last fall for two years previous and I'm sure I will have a couple more this tax season from cash paying clients.

Seems like an awful lot of people are getting audited for paying cash for childcare.