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Child Care Expenses When Calculating Disposable Income in Bankruptcy

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  • 02-22-2018, 04:18 AM
    Heartsick123
    Child Care Expenses When Calculating Disposable Income in Bankruptcy
    My question involves bankruptcy in the state of: NH

    What proof do I need to claim child care expenses on my form 122C-2? Will bank account records be enough? What if I pay under the table? Also, is there a monthly limit?
  • 02-22-2018, 08:22 AM
    Mr. Knowitall
    Re: Child Care Expenses When Calculating Disposable Income in Bankruptcy
    If the veracity of your claimed child care expenses becomes an issue, I doubt that your bank records would demonstrate that you were paying for child care (as opposed to simply paying for something). If you are paying somebody under the table, and have no contract, receipts, or other proof that you're paying for child care, that could be a problem for you if the claim is disputed.

    If you're going to try to claim that you're paying somebody under the table, in an amount so large as to exceed what the trustee may view as reasonable for child care, that would trigger concerns of fraud -- and if you're paying at that level, the question is raised as to why those payments aren't being made to the best child care provider in your area as opposed to being paid under the table to somebody who doesn't even operate a licensed facility.
  • 02-22-2018, 04:09 PM
    Heartsick123
    Re: Child Care Expenses When Calculating Disposable Income in Bankruptcy
    I work overnights, so my sister (who has worked as a full time nanny) stays at my house 3 nights a week and brings my kids to school in the morning. I pay her 150 a week and my bank record shows that payment every week for the past 2 years. I also pay my 20 year old daughter 50 a week for babysitting at other various times (when i have overtime or just need someone on weekdays or weekends) these payments are also on a regular basis. In addition, i pay about 4,000 a year for summer camp (since i sleep during the day). That is obviously on the books.
    That comes out to about 1200 a month. I don't think that is unreasonable, but I haven't been able to find any guidelines, so I wasn't sure. That is for 2 kids during the school year and 4 kids for summer camp.
    I was more concerned about the fact that I never really thought about doing the whole nanny tax thing because it's my family member and 150 a week didn't seem like a very big deal. So, I guess the question would be if I should change that now. Thanks.
  • 02-22-2018, 06:50 PM
    llworking
    Re: Child Care Expenses When Calculating Disposable Income in Bankruptcy
    Quote:

    Quoting Heartsick123
    View Post
    I work overnights, so my sister (who has worked as a full time nanny) stays at my house 3 nights a week and brings my kids to school in the morning. I pay her 150 a week and my bank record shows that payment every week for the past 2 years. I also pay my 20 year old daughter 50 a week for babysitting at other various times (when i have overtime or just need someone on weekdays or weekends) these payments are also on a regular basis. In addition, i pay about 4,000 a year for summer camp (since i sleep during the day). That is obviously on the books.
    That comes out to about 1200 a month. I don't think that is unreasonable, but I haven't been able to find any guidelines, so I wasn't sure. That is for 2 kids during the school year and 4 kids for summer camp.
    I was more concerned about the fact that I never really thought about doing the whole nanny tax thing because it's my family member and 150 a week didn't seem like a very big deal. So, I guess the question would be if I should change that now. Thanks.

    Its not just your sister but your daughter as well. Anytime you pay someone more than 1900.00 a year you are potentially subject to the nanny tax. If you are paying your daughter 50.00 a week 52 weeks a year that is 2600.00.

    Now, I am not sure that the bankruptcy court is going to police that particular issue...but if your tax returns do not reflect the full amount of child care you pay for, that would tend to get their attention.

    However, I will say that what you are paying for child care when you work nights is pretty reasonable for multiple children.
  • 02-22-2018, 07:30 PM
    Heartsick123
    Re: Child Care Expenses When Calculating Disposable Income in Bankruptcy
    Thank you for the response. I will look more into the subject and figure out where to go from here.
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