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Section 5: Financial Matters 29 Options for Receiving Payment • Monthly (1 time per month) » Payment for services from the 1st of the month through the last day of the month. • Semi-Monthly (2 times per month) » Payment for services from the 1st of the month through the 15th of the month and then the 16th of the month through the last day of the month. • Claims: The full previous month’s billing will be available to bill by the 2nd of the month. For example, June 1-30 will be available to bill by July 2. There may be exceptions. Please contact your RD if you are missing claim lines in the portal. All claims must be made within 90 days of service. Note: An RD will provide training and handouts on how to complete billing using the Provider Portal. Providers can request to bill semi-monthly, but approval will be at the RD’s discretion. Providers must demonstrate a history of billing without errors. Tax Information Child care providers are considered self-employed and are not employees of DHHS, therefore the department does not withhold federal or state income tax or federal unemployment insurance tax from payments. DHHS does not provide guidance on tax documents. A Form 1099 is issued to all providers. Only one 1099 should be received. Please contact DHHS if more than one is received as this indicates an incorrect Social Security Number or Tax ID number was used. In-home child care providers are considered service providers and employees of the family. Due to this, the department will withhold Federal Insurance Contribution Act (FICA) taxes from in-home provider payments. FICA Tax Withholding (IH Providers only) In-home child care providers are subject to social security and Medicare tax (i.e. FICA) withholding according to requirements of the Household Employee Act. The department shall withhold this tax from all payments to affected providers. If a provider’s earnings do not reach the income limit per calendar year per family, the amount withheld for that year is refunded. In some situations, the department withholds Social Security taxes from in-home provider payments. The department, upon receiving a document that appoints the parent/caregiver as agent for the provider, acts on behalf of the parent/caregiver to withhold mandatory taxes from the provider and pay the parent/caregiver’s matching tax share to the Internal Revenue Services. A Form W-2 is sent to each provider who earned qualifying FICA wages. A separate W-2 is provided for each family served since the family is considered the employer. Due to this, a provider may receive more than one W-2 from DHHS. Tax Statements DHHS will issue all Tax Statements, Forms 1099 and Forms W-2, if applicable, to the provider and the IRS. The total amount paid to each provider is determined by adding the amounts shown on Forms 1099 and W-2. Overpayments + Underpayments DHHS must take all reasonable steps necessary to promptly correct overpayments and underpayments. Providers should contact their assigned RD if there is an error on their claim before they try to submit. Once it is submitted, no one can edit the claim. If the provider does not appeal or contact the department to work out a repayment agreement, the overpayment will be recouped from future billings for the same or different children, or from another service. If the evidence clearly establishes that a provider willfully over-billed the department, the RD will refer the provider to the necessary Special Investigations Unit. Note: There may be random audits or referral to the Issuance and Collections Center (ICC) resulting in overpayments or underpayments. Appeals Process If the provider wishes to appeal their overpayment, they will need to reach out to the ICC using the contact information on the demand letter informing them of the overpayment. The provider has a 30- day window from date indicated on the letter to appeal the overpayment.