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Ok you said they have to have a business name? Is that them just getting a TAX ID # and giving themselves a name?

Tom Copeland

it also means registering their business name with the state.


I have volunteer helpers (yay for mom and mother-in-law)! Are there any possible issues with this situation? Are we allowed to give thank you gifts? Deduct the cost of those gifts?

Tom Copeland

If the volunteers are related to you then you can give them gifts. Such gifts would not be deductible and are not income to the relative. See my previous article "To Hire a Relative or Not?"


This sounds somehow complicated. But I think for the meantime I have to absorb everything that you said on your blog since I have someone helping me at home doing some tasks.

Seattle Bathroom Remodel

I totally go along you! I have often felt that way but nobody really would like to take it as seriously as we do apparently. Excellent blog anyway, I am going to have to stop by more frequently.

Jackie Ek-Pangerl

I have been a college educated licensed daycare provider for 36 years, and I am saddened to see where this profession is going. The first intent of the provider used to be the children, parents and the family of the provider-in fact a bond of trust was extablished between all of them. Now it is micro-managed by rules and regulations passed down by good-doers who probably have never stepped foot into a home daycare. In all respects I'm sure it is well intended, but it seems like lawyers and crazy lawsuits are now ruling this business like all others. Basic rules and regulations need an interpretation from an attorney and an accountant and even then answers will differ. Additionaly license workers themself have different answers. Likiewise, required classes make little sense. For instance, the last one I attended told providers that "you must go into the bathroom with each young child" and "close the door for privicy" but "don't let the other children out of sight". Excuse me-a provider in the bathroom with a child with the door closed? And how do you "close the door" and "keep the rest of the group in your sight?" This is just one example of how crazy this is becoming.(And is there any wonder why there is such a high unemployment rate? When the government makes it so expensive and difficult to hire a college kid-otherwise unemployed- to help in a home daycare for a summer?)

Tom Copeland

Jackie - I can't disagree with anything you are saying. I've heard the same complaint about the stupid idea of bathroom privacy from other providers as well!

Jackie Ek-Pangerl

Thank you for letting me vent. Another stupid suggestion in a class told us never to say you are "proud" of a child. Excuse me? I have raised seven of my own kids who are extremely successful-all in the top 3% of their class. I've had countless daycare children with whom I am still in contact with who are doing very well. I recently had one with a disfunctional home life come back to tell me his time with me was "the best years of his life". All of them I am proud of and made that clear throughout their time with me. Here is a question for you, isn't there a lawsuit waiting to happen for everything? Silly as it sounds, could I get sued for tutoring the children in my care if they flunk a test for instance? This is a serious question by the way. (By the way in the aboveformentioned class, we were told we should not use the bathroom during daycare hours. I guess we need "Daycare Provider's Depends" This one is a joke-I think :)

Tom Copeland

I think telling children you are proud of them is a terrific thing to do! You can't get sued if a child flunks a test, unless you are selling your services with the understanding that that the child will pass the test. To protect yourself against all potential lawsuits, make sure you have business liability insurance.

M. King

ok about this paying your employee situation I have been trying to figure this situation out for myself and someone that i am considering hiring to come in and help me to take care of the children.the employee wants to recieve taxes back at the end of the year I the employer was told by another provider that they give their employees a 1099 at the end of the year is that legal and how would that hurt or benefit the employee or the employer

Tom Copeland

M. King - It's illegal to give employees a 1099 and pretend they are independent contractors, when they are not. If you did this, and the employee got injured, you wouldn't have workers compensation insurance and would be required to pay the persons entire medical bill - plus penalties. Also, the IRS can come after you and make you pay Social Security tax for the employee, plus interest and penalties. As my article makes clear - you can't treat such people as independent contractors.

Cynthia Saunders

What if you hire a tutor and music teacher to come to your family daycare to provide an extra service to clients? Are they employees or independent contractors?


Tutors and music teachers and swim instructors, etc are independent contractors because the provider doesn't direct and control their work.

Cynthia Saunders

Just to clarify, if I hire a tutor to come to my daycare two-days a week for a total of 9 hours a week, then this tutor is an independent contractor? Thanks so much!

Cynthia Saunders

I have a large family daycare license... if I have a tutor in the house with me am I allowed to have up to 14 children or just 6 kids because the tutor is an independent contractor and not an "employee"? Thanks!


If the tutor is providing one on one help to children on specific topics that the tutor has specialized skills at teaching, then the tutor would be an independent contractor. If the tutor is doing the same work as any helper would do, then the tutor is an employee. Whether the tutor is an employee or an independent contractor has nothing to do with whether he/she meets your state child care regulations regarding staffing. Check with you licensor about this.

Miriam Williams

I live in TX, what forms need my prospective employee to fill out? what forms I need to fill out?


The federal form your employee needs to fill out is W-4. This will help you determine how much federal income tax to withhold. You will also need to file a quarterly Form 941 and an annual W-2 and W-3. You will also need to file state tax forms. See my article on this:http://www.tomcopelandblog.com/2011/04/the-many-responsibilities-of-hiring-an-employee.html

Grace Sorensen

What if I have someone come in 2-3 hours a day to clean & do food prep for the child care business, but not care for the children? Would they be an employee, or could I do a 1099 for them? Thank you


Cleaning and cooking would not be considered work done as an employee in your situation. So, they are an independent contractor. Issue a Form 1099 if you pay any one person more than $600.

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