Can I Claim Childcare Costs I Pay Under the Table?

To claim the Child and Dependent Care Credit or use a Dependent Care FSA, the IRS requires you to provide the caregiver's name, address, and taxpayer ID number (SSN or EIN). If you pay a caregiver "under the table" and they refuse to give you their information, you can claim the credit anyway by showing you exercised due diligence to obtain it. However, if you pay a household employee more than $2,700 in 2024, you're required to pay employer payroll taxes ("nanny tax") — failing to do so creates legal risk for you. Paying caregivers properly also protects them by building their Social Security record. It's worth having a formal arrangement even for informal care.