TAP 03-015

Provider Identification Number

Statement of Issue:

The dependent care credit is claimed on Form 2441 if Form 1040 is used or, on Schedule 2 for Form 1040A, and is available to married couples only if they file a joint return. (Code Sec. 21 (e)(2)).

The credit is claimed by the taxpayer reporting on his or her Form 2441 or Schedule 2 the correct name, address, and taxpayer identification number (TIN) of the dependent care provider. A tax-exempt provider doesn't have to supply a TIN (Code Sec. 21 (e)(9). The dependent care provider must provide this information and certify the TIN on Form W-10, Dependent Care Provider's Identification and Certification.

Proposal:

TAP recommended that dependent care providers be allowed to provide a PTIN instead of their social security numbers as a taxpayer identification number. The Form W-7P could be re-titled, “Application for Preparer or Dependent Care Provider Tax Identification Number.” By using a PTIN, the childcare provider will meet the requirement under section 21(e)(9)(A) of furnishing an identifying number on returns where the credit is taken.

Response Notes:

Erickson responded that this proposal cannot be adopted unless the Treasury regulations under section 6109 are amended.

Section 21(e)(9)(A) requires the taxpayer identification number of the dependent care provider. Section 6109(d) requires that "the social security number issued to an individual… shall, except as otherwise specified under regulations of the Secretary, be used as the identifying number of such individual for purposes of this title." Regulations section 1.6109-2 specifically provides for the P-TIN exception for preparers.

There is no exception currently in the regulations to allow for a "dependent care provider TIN." The only exception relevant to a child care provider is under Regulations section 301.6109-1(a)(1)(ii)(D), which allows the use of an employer identification number (EIN) if the provider is in a trade or business. Although TAP recognizes that dependent care providers can use EINs, TAP advocates a separate dependent care provider TIN because "the SS4 Form is very intimidating and most of the information requested on the form is not relevant to dependent care providers."

The decision to amend the regulations will require the involvement of both the Office of Chief Counsel and the Office of Assistant Secretary for Tax Policy.