I get a lot of questions from child care providers on how to respond to these requests.
I recommend that you get an Employer Identification Number (EIN) and give this number to parents, not your Social Security number. It's free. If you get one in 2012, you can use it for your 2011 taxes. If you already have one, continue to use it, year after year.
I recommend that you fill out two ocpies of IRS Form W-10 and add the amount the parent paid you at the top of the form. Sign one copy and give it to the parent. You will include your EIN number on this form. Ask the parent to sign the second copy and keep it with your other tax records. Many providers give parents end-of-year receipts, but few ask parents to sign an extra copy for their records. This is important to do in case the parent later claims they paid you more than they did.
Note: You are not required to give parents your identification number unless they give you a copy of IRS Form W-10. You are not required to give parents an end-of-year receipt. Even though these are not requirements, I suggest you follow my recommendations because it's the professional thing to do.
See further details in my two previous articles:
Redleaf Press publishes a receipt book especially designed for family child care providers.
Image credit: www.redleafpress.org
For more information, see my book 2011 Family Child Care Tax Workbook and Organizer.