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05/23/2012

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Natalie

Thank you. This cannot be repeated often enough!!

C

Hi Tom--what about a parent who volunteers while their child is in the home. Works with all the children? Has training and requirements to be alone with the children.

Tom Copeland

C - There are no payroll tax issues if a parent volunteers to help care for a child, assuming they meet all child care licensing rules. But, if the parent is receiving free child care in exchange for their volunteer work, then there is a barter situation. In a barter, both sides must report the transaction as if money changed hands. That is, you would have to report as income the money the parent would have paid you. The parent would have to report as income the money should would have earned. And - you must treat the "money" paid to the parent as employee wages, subject to Social Security, federal and state unemployment taxes, etc.! Yikes! Stay away from bartering in this situation.

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