We signed up for a full dependent care FSA ($5000) through my wife's employer at the end of last year knowing we'd need child care this year in some form.
This year we've found a local older woman who watches our child part time in our home about 15 hours a week. She is married and otherwise retired I believe, but does this for some spare money. (Don't fully know her financial situation though.) We do not have her Social Security Number, and the general understanding is that she may not be reporting this money either.
I wasn't aware the dependent care FSA submission through an employer required knowing the babysitter's Social Security Number, just an informal invoice/receipt and name/address of babysitter.
Is it required now for us to get her SSN? If she has it will she have a large tax notice due if she then fails to report her income?
Is it possible not to include the SSN, but her name/address? And if that's the case, will they still track her down if she doesn't report the income?
I'm very worried about damaging the relationship w/ this babysitter, or losing her over this issue, but obviously don't want to lose the dependent care FSA money either.