Taxes and Legal Responsibilities for Providers
All income received for providing child care is taxable. Child care providers who work out of their homes are considered self-employed, independent business owners. However, Minnesota Statute defines any child care provider doing care in the home of the child as an employee of the parent. The following are the responsibilities of parents:
- Paying federal unemployment taxes (FUTA)
- Withholding Social Security
- Providing state workers compensation insurance
- Withhold federal and state income tax
All providers need to keep good business records of their income and expenses throughout the year. If you are providing child care for a family on the Child Care Assistance Program, Ramsey County will issue an IRS 1099 at the end of the calendar year to help you file income taxes.
For information, publications, and business tools that will help you with any of the following, contact Resources for Child Caring at 651-641-0305.
Curious about what early childhood professionals are charging? Child care rates are available for the East Metro area (Anoka, Ramsey, and Washington Counties).
Information for Family Child Care Providers
Family child care providers will find business-related information and resources by visiting the Business of Child Care section of our Web site, a program of Resources for Child Caring that has supported the business of family child care for over 15 years.
