Tax Info

FAQs for 2022 Taxes

Are my SSPS Payments Tax Reportable Income?

Many payments made through SSPS must be reported as income for taxes. If staff approve a service for payment, the staff should tell the service provider whether they will receive a tax form.

There are two types of tax reportable payments: 1099 income or W-2 income.

A Child Care Center is a licensed or certified child care provider that regularly cares for a group of children for less than twenty- four hours at a time.
A Family Licensed Home Child Care Provider is someone who regularly cares for up to twelve children in their own home.
An Exempt Child Care Providers is someone who provides care in the child’s home or the provider’s home. The provider must be a relative or an approved adult 18 or older who does not live with the child. However, a grandparent may live with the child and still qualify as an exempt provider – aunt etc.

The date of payment, not the date of service, determines the tax year.

The type of service determines how the payment is taxed. Because of this, one provider may receive a 1099, one or more W-2 forms, and one or more FICA refunds (Federal Insurance Contribution Act).

Federal Income Tax Withholding

Non-Union Covered Services

People who are not in a union, are self-employed, or run a business must contact the Internal Revenue Service (IRS) at 1-800-829-1040 to ask about their Federal Income Tax responsibility.

SSPS Remittance Advice and Update Reminder

SSPS sends a remittance advice document with every payment. This includes W-2 income, 1099 income, and payments that are not taxable. This document lists each service included in the payment. 

If any of the services are paid as W-2 income, the remittance advice document also shows the FICA deduction.

The remittance advice will also be available in the SSPS Provider Portal within 24 hours after the payment is processed. If you are not signed up for the SSPS Provider Portal and would like access, please contact SSPS at sspsmail@dcyf.wa.gov.

1099

1099 earnings apply to people who are self-employed or run a licensed business. A 1099 form is issued for services that the federal government defines as 1099 tax reportable. 1099 earnings are reported to the IRS. All1099 payments are added together for each service provider. A provider may work for more than one client, but they will receive only one 1099 form that shows their total earnings.

If SSPS has the provider’s business tax identification number (TIN) on file, the 1099 will be issued under that number. If not, the 1099 will be issued under the provider's Social Security Number (SSN).

No FICA withholding and no federal income tax withholding is done for 1099 earnings.

Self-employed people should contact the Social Security Administration at 1-800-772-1213 to learn how to pay into Social Security benefits.

W-2 

W-2 income is the pay an employee (service provider) earns when working for an employer (recipient/client). W-2 income is reported to the Social Security Administration (SSA) and the Internal Revenue Service (IRS).

A provider may work for more than one client. Because a W-2 is issued for each employer (recipient/client), a provider may receive more than one W-2 form.

By federal law, the Social Service Payment System takes out FICA from payments considered W-2 income. FICA stands for Federal Insurance Contribution Act and includes both Social Security (also called Old Age Survivors Disability Insurance, OASI or OASDI) and Medicare taxes. FICA is sent to the Social Security Administration after the provider’s total wages from that employer reach the threshold set by the Social Security Administration for the year If the provider earns less than the threshold from that employer during the tax year, any FICA taken out will be refunded.

If you work for more than one employer, your total earnings may be more than the threshhold. But each employer’s earnings are counted separately. You will get a W-2 form from each employer you worked for. If you earned less than the threshold from one employer, any FICA taxes taken from that employer’s payments will be refunded. 

FICA Refunds

If an employee earns less than the threshold set by the Social Security Administration in a year from one employer for W-2 taxable services, they will get a FICA refund. The FICA refund is for the FICA taxes that were taken from that employer’s payments during the year.  

Because FICA refunds are given for each employer (recipient/client) separately, a provider may get more than one FICA refund.

Additional DCYF Tax Information

Contact the DCYF Tax Desk if:

  • You have questions about a tax document
  • You need a replacement copy of your 1099/W-2

DCYF Tax Desk
(833) 725-3502 Toll free
DCYF.Taxreporting@dcyf.wa.gov