I have in home childcare and give my clients a receipt each year end with all the information needed for them to claim their childcare payments to me. When they claim childcare expenses on their taxes do they report the entire amount paid to the IRS or just the amount figured that is allowed to them for deduction? If they claimed more than they actually paid me would it red flag on my taxes if the amount that I claim as payments made to me differ from what clients report?

Your give them a 1099 ? And supply the IRS a copy ?

You must report all the money they paid you. this is your gross income,

Most people have NO CLUE that there are limits as to how much they can get back on the Child Care Credit, so they enter what they paid on the Form 2441.

If they claim more than what they paid, it COULD red flag your return for closer examination if the numbers to not at least come close to matching.

Fr Chuck,

It is the other way around; the parents would give the day care provider the Form 1099-MISC, because they are paying HER.

I believe that payments to daycare providers are exempt from the 1099 rules, but I am not sure.