You fill out IRS Form W-10 by asking your dependent care provider to print their name, address, and Taxpayer Identification Number (TIN), then sign and date the bottom; you keep the form in your records and use the data on Form 2441 to claim the Child and Dependent Care Credit under Internal Revenue Code §21. The form is never mailed to the IRS, but failure to obtain it can cost you hundreds or thousands in lost credits and trigger a §6723 penalty of $50 per missing TIN.
The American Rescue Plan briefly raised the credit to a refundable $8,000 per child in 2021, but for tax year 2025 the credit returns to a maximum of $1,050 for one child and $2,100 for two or more, according to IRS Publication 503. About 26 million American families claim some form of dependent care tax benefit each year, and the W-10 is the gatekeeper document for nearly every one of them.
Here is what you will learn in this guide:
- 📝 How to complete every line of Form W-10 without errors that delay your refund
- 👶 How the W-10 connects to the Child and Dependent Care Credit and Dependent Care FSA rules
- ⚖️ The federal penalties under §6109 and §6723 for missing TINs
- 🏛️ How state dependent care credits in California, New York, and elsewhere stack on top of the federal credit
- 🚫 The seven biggest mistakes that cause IRS notices, audits, and lost credits
What Form W-10 Is and Why It Exists
Form W-10, called the Dependent Care Provider’s Identification and Certification, is the official IRS document used to gather a care provider’s name, address, and TIN. The form exists because §21(e)(9) requires every taxpayer claiming the dependent care credit to report the provider’s identifying information on their return. Without that information, the IRS cannot match the credit to a real, taxable provider, and abuse of the credit becomes easy.
The W-10 is a one-page, three-part form: Part I collects the provider’s information, Part II is for household employers who must furnish their own EIN to the provider, and the certification line at the bottom is signed by the provider under penalty of perjury. The form is not filed with the IRS. Instead, you keep it with your tax records, and you transcribe the data onto Form 2441, Part I when you file your return.
The plain-English explanation is simple: the IRS wants to make sure both sides of the transaction report it. The consequence of skipping the W-10 is harsh, the IRS can deny your credit, send a CP75 audit notice, and assess back tax plus interest. A common misconception is that the W-10 must be mailed to the IRS; it must not, it stays in your shoebox of records.
Statutory Basis Under IRC §21 and §6109
IRC §21 creates the credit, and §6109(a)(3) authorizes the IRS to require taxpayers to furnish the TIN of any person who provides services. Together, these statutes make the W-10 the practical tool for gathering that TIN. The Treasury implements these rules through Treas. Reg. §1.21-1(h).
The consequence of ignoring §6109 is a §6723 penalty of $50 per failure, capped at $100,000 per year. A real-world example: Maria hires a nanny, never asks for a Social Security Number, and claims $6,000 in expenses. The IRS denies the credit, assesses tax of about $1,200, adds the $50 penalty, and Maria loses thousands in lost benefits.
A common misconception is that the penalty is the worst outcome. In truth, the lost credit is usually far larger than the penalty, sometimes ten or twenty times larger.
Who Must Use the Form
Any taxpayer who plans to claim the Child and Dependent Care Credit or exclude employer-provided dependent care benefits under §129 should request a W-10 from each provider. This includes parents using daycare centers, in-home nannies, after-school programs, and even some summer day camps as defined in Pub. 503.
The plain-English rule is, if you pay them and you want the tax break, you need their TIN. The consequence of not getting it is denial of the credit unless you can show “due diligence.” A common misconception is that grandparents are exempt; they are not, unless they qualify as your dependent or your child under age 19, per §21(e)(6).
Step-by-Step: How to Fill Out Form W-10
The form has only a handful of lines, but each one matters. Below is a full walkthrough using the current version of the W-10 PDF. Print the form, hand it to the provider, and ask them to complete Part I in their own writing.
Line-by-Line Walkthrough
Provider’s Name (Line 1). The provider writes their full legal name. For a sole proprietor nanny, this is their personal name as shown on their Social Security card. For a daycare center, this is the legal business name registered with the state. The consequence of using a nickname or “doing business as” only is a TIN mismatch in IRS systems, which can trigger a CP2000 notice.
Address (Line 2). The provider’s street address, city, state, and ZIP code go here. Use the address where they receive IRS mail, not the daycare’s drop-off entrance. A common mistake is entering the parent’s address; that defeats the entire purpose of the form.
Taxpayer Identification Number (Line 3). This is either a Social Security Number (SSN) for an individual, an Employer Identification Number (EIN) for a business, or an Individual Taxpayer Identification Number (ITIN) for a non-citizen who cannot get an SSN. The provider checks the correct box and writes the nine-digit number.
Tax-Exempt Box. If the provider is a §501(c)(3) church-run or nonprofit daycare, they check the “tax-exempt” box and write only the name and address; no TIN is required, per the Form 2441 instructions. The consequence of falsely claiming tax-exempt status is the §6723 penalty against the provider and a denied credit for the parent.
Certification (Bottom). The provider signs and dates under penalty of perjury that the TIN is correct. The signature is the legal hook that lets the IRS pursue the provider if the number is fake.
Part II for Household Employers
If you are a household employer who pays a Schedule H nanny tax, you also fill in Part II of the W-10 to give the provider your EIN. The consequence of skipping Part II is that your nanny cannot accurately report wages on their own return.
A real-world example: David hires Sara as a live-in nanny, pays her $32,000 a year, and gets an EIN from the IRS EIN application. He completes Part II of the W-10 so Sara can list David’s EIN on her own Form W-2. The plain-English point is that the W-10 flows in both directions when there is an employer-employee relationship.
Recordkeeping Rules
Keep the signed W-10 with your tax records for at least three years from the date you file the return that uses it, per the §6501 statute of limitations. For fraud or substantial omission, the period extends to six years.
The consequence of losing the form is that, if audited, you may have to reconstruct the provider’s information through bank statements, contracts, or sworn affidavits. A common misconception is that the IRS keeps a copy; they do not, because the form is never filed with them.
Connecting the W-10 to Form 2441
The W-10 is a feeder document. The actual credit is claimed on Form 2441, which is attached to your Form 1040. Each provider’s name, address, and TIN from the W-10 goes on Line 1 of Form 2441.
Form 2441 has three parts. Part I lists the providers. Part II computes the Child and Dependent Care Credit. Part III handles employer-provided dependent care benefits excluded under §129. Skipping any part where it applies leads to denial of the benefit.
The plain-English link is this, no W-10, no clean Form 2441, no credit. The consequence of a TIN mismatch on Form 2441 is an automated IRS rejection through the Modernized e-File system. A real-world example: Priya files electronically, lists her daycare’s EIN with one digit off, and her return rejects within 24 hours, forcing her to chase the provider for a corrected number during peak filing season.
Calculating the Credit Under §21
For tax year 2025, the credit covers up to $3,000 of expenses for one qualifying person and $6,000 for two or more, per Pub. 503. The credit percentage slides from 35% at $15,000 of adjusted gross income down to 20% above $43,000.
A real-world example: Linda earns $80,000 of AGI, pays $7,200 to a daycare for her two kids, and claims a 20% credit on the $6,000 cap, worth $1,200. The plain-English consequence of getting the W-10 wrong is losing that $1,200, not a tiny rounding error. A common misconception is that the credit is refundable for everyone; it is non-refundable for tax year 2025, per §21(g).
Dependent Care FSA Coordination Under §129
If your employer offers a Dependent Care FSA, you can exclude up to $5,000 per year (or $2,500 if married filing separately). The same provider TIN that goes on the W-10 must also be reported on Form 2441 Part III to substantiate the exclusion.
The consequence of failing to substantiate the FSA is that the entire $5,000 becomes taxable wages on your Form W-2 Box 10. A real-world example: Tomás contributes $5,000 to a Dependent Care FSA, never gets a W-10 from his au pair agency, and the $5,000 is added back to his wages, costing him roughly $1,500 in extra federal tax.
Three Common W-10 Scenarios
Below are the three most common situations parents face when collecting a W-10 from a care provider.
Scenario 1: Cooperative Licensed Daycare
| Parent’s Step | Daycare’s Response |
|---|---|
| Hand the daycare a printed W-10 at drop-off | Front desk completes Part I with the center’s EIN |
| Ask for the signed copy within one week | Director signs and returns within two days |
| File Form 2441 with the EIN | Daycare reports the income on its Form 1120 or 990 |
Scenario 2: In-Home Nanny Who Refuses
| Parent’s Step | Outcome |
|---|---|
| Send a written W-10 request via certified mail | Nanny ignores the request |
| Document the refusal with a dated letter and proof of delivery | Parent attaches a statement to Form 2441 explaining “due diligence” |
| Claim the credit anyway under Pub. 503 due-diligence rule | IRS may still allow the credit if the records are solid |
Scenario 3: Grandparent Caregiver
| Parent’s Step | Tax Result |
|---|---|
| Confirm grandparent is not the parent’s dependent | W-10 is required just like any other provider |
| Collect grandparent’s SSN on the W-10 | Grandparent reports income on Schedule C or Schedule H |
| File Form 2441 with grandparent’s name and SSN | Credit is allowed if all other §21 tests are met |
Named Examples That Bring the Form to Life
Example 1, Maria the Single Mom. Maria earns $42,000 and pays $9,000 a year to “Sunshine Kids Academy” for her three-year-old. She prints a W-10, the director signs it the same day with the center’s EIN, and Maria claims a 21% credit on $3,000 of expenses, worth $630. Without the W-10, her §21 credit would be denied entirely.
Example 2, David and Sara the Nanny. David pays Sara $32,000 a year. He gets an EIN online, files Schedule H with his 1040, and uses the W-10 to give Sara his EIN. Sara uses David’s W-10 Part II info to file her own Form 1040 cleanly.
Example 3, Priya and the Au Pair Agency. Priya hosts an au pair through a J-1 visa program. The agency provides a W-10 with the au pair’s ITIN, not the agency’s EIN, because the au pair is the actual care provider. Priya claims her credit and excludes $5,000 of FSA dollars without trouble.
Example 4, Linda the Refused Request. Linda’s former nanny refuses to provide an SSN. Linda sends a certified letter, documents the refusal, attaches a written statement to Form 2441, and claims the credit under the “due diligence” rule from Pub. 503.
Mistakes to Avoid
- Mistake 1, Mailing the W-10 to the IRS. The form is never mailed; the consequence is a confused IRS clerk and a lost form, but no penalty.
- Mistake 2, Accepting an unsigned W-10. Without a signature, the certification has no legal weight, and the IRS can disallow the credit on audit.
- Mistake 3, Using the daycare’s “DBA” name only. A name mismatch with the EIN triggers a CP2000 notice and possible credit denial.
- Mistake 4, Listing the wrong TIN type. Marking “EIN” when the provider is a sole proprietor with only an SSN causes IRS rejection of Form 2441.
- Mistake 5, Skipping the W-10 for grandparents. Unless the grandparent is your dependent, you still need the form, or you forfeit the credit.
- Mistake 6, Forgetting Part II as a household employer. Your nanny cannot file an accurate return without your EIN, which can lead to Schedule H errors.
- Mistake 7, Throwing away the W-10 after filing. The IRS can audit for three years, sometimes six, under §6501; destroying the form too early leaves you defenseless.
- Mistake 8, Trusting a “tax-exempt” claim without proof. Always verify the provider’s status on the IRS Tax Exempt Organization Search.
- Mistake 9, Filing Form 2441 with a missing TIN and no due-diligence statement. That guarantees a denied credit and a $50 §6723 penalty.
Do’s and Don’ts
Do’s
- Do print the latest W-10 directly from IRS.gov, because old versions can be rejected by tax software.
- Do request the W-10 before the first payment, since providers are far more cooperative when money is on the line.
- Do verify the TIN against a Form W-9 or business license, because cross-checking catches typos.
- Do store the form digitally and on paper, so a lost laptop does not equal a lost credit.
- Do attach a “due diligence” statement to Form 2441 when a provider refuses, because it preserves the credit under Pub. 503.
Don’ts
- Do not mail the W-10 to the IRS, because the form is for your records only.
- Do not accept a verbal TIN, because oral statements fail the certification test under §6109.
- Do not photocopy a Social Security card in place of the form, because the W-10 has a required certification line that a card lacks.
- Do not pay providers in cash with no records, because cash plus no W-10 equals automatic denial.
- Do not assume your tax software will catch errors, because the W-10 itself is outside the software’s reach.
Pros and Cons of Using Form W-10
Pros
- It is the simplest IRS form to complete, often under five minutes per provider.
- It legally documents “due diligence” under §6109, protecting the parent on audit.
- It supports both the §21 credit and the §129 FSA exclusion, doubling its value.
- It places the certification burden on the provider, shifting legal risk away from the parent.
- It is free, requires no postage, and never expires within a tax year.
Cons
- It depends on provider cooperation, which is sometimes hard to secure.
- It does not guarantee the credit if other §21 tests fail, such as the earned-income rule.
- It must be re-collected each year if the provider’s information changes.
- It does not capture wages or benefits, so household employers still need Schedule H and Form W-2.
- It offers no protection if the provider supplies a fake TIN that the parent does not catch.
State Nuances on Top of the Federal Rules
While the W-10 is purely federal, many states layer their own dependent care credits on top of the federal credit, and they often demand the same provider information. California’s Form 3506 requires the provider’s name, address, and TIN, mirroring federal practice. New York’s Form IT-216 does the same.
Minnesota, Oregon, and Maryland all use the federal W-10 data to compute their own credits. The plain-English point is that one well-completed W-10 powers both federal and state filings. The consequence of mismatched data between federal and state returns is a state-level audit, which often runs longer than a federal audit.
A common misconception is that state credits are tiny. In truth, Minnesota’s K-12 and dependent care credits can exceed $1,000 for low-income households, on top of the federal credit.
Penalties and Court Rulings to Know
The big federal stick is the §6723 penalty, $50 for each failure to provide a TIN, capped at $100,000 per year. The bigger stick is denial of the credit itself, which the Tax Court has upheld repeatedly.
In Pongracz v. Commissioner, the Tax Court denied a dependent care credit because the taxpayer could not prove the provider’s identity. In Bunney v. Commissioner, the court emphasized that good records, including a signed W-10, are the taxpayer’s burden under §7491. The plain-English lesson is, the burden is on you, not the IRS.
A real-world example: a New Jersey couple lost a $2,100 credit at audit because the provider’s SSN was missing one digit, and the couple had no signed W-10 to back it up. A common misconception is that the IRS will “figure it out” from a 1099 or W-2; they will not, the W-10 is the parent’s responsibility.
FAQs
Do I need to mail Form W-10 to the IRS?
No. The form is for your records only. You keep it for at least three years and transcribe the data onto Form 2441 when you file your return.
Is Form W-10 required by law?
No. The form itself is not mandatory, but §6109 requires you to report the provider’s TIN, and the W-10 is the easiest, IRS-approved way to gather it without errors.
Can I claim the credit if my provider refuses to give a TIN?
Yes. Under Pub. 503 due-diligence rules, you can attach a statement to Form 2441 showing your written request and the refusal, and the credit may still be allowed.
Does a tax-exempt church daycare need to give a TIN?
No. A genuine §501(c)(3) provider checks the “tax-exempt” box on the W-10 and writes only the name and address, per the Form 2441 instructions.
Can I use one W-10 for multiple tax years?
Yes. If the provider’s name, address, and TIN do not change, the same signed form covers later years, but most tax pros recommend a fresh W-10 every year for safety under §6501.
Do grandparents who babysit need to complete a W-10?
Yes. Unless the grandparent is your dependent or your child under 19, they are a paid provider under §21(e)(6) and must complete the form for you to claim the credit.
Can a summer day camp count as a dependent care provider?
Yes. A day camp qualifies under Pub. 503, but overnight camps do not, and the camp must complete a W-10 just like any other provider.
Do household employers really fill in Part II?
Yes. Part II provides your EIN to the worker, which they need for their own Form W-2 and to match wages reported on your Schedule H.
Will a missing TIN trigger an automatic IRS notice?
Yes. The IRS Modernized e-File system flags missing or mismatched TINs on Form 2441 and often issues a CP75 or CP2000 notice within months of filing.
Can I e-sign Form W-10?
Yes. The IRS allows electronic signatures on most forms, including the W-10, under the IRS e-signature guidance, provided the e-signature meets standard authentication rules.
Does an au pair need to fill out a W-10?
Yes. The au pair is the actual provider under a J-1 visa, and they typically use an ITIN on the W-10 because most are not eligible for an SSN.
Can the IRS penalize the provider for a fake TIN?
Yes. The provider signs under penalty of perjury, and the IRS can pursue the provider under §6723 and even §7206 perjury statutes if the number is intentionally false.
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