I would not do it either. Too much risk! If someone reports you and you have a fine or your daycare closed down, will you still feel it is worth it? Or if something happens and your insurance is void because of the extra child? I know that having that child is not a problem for you in terms of caring for the child (I have 5 daycare kids and my own 2 kids under 10 and handle it quite well) and it isn't necessarily fair that our own kids don't count, but this child would. However, the law is the law and I would not do anything to put yourself in a situation that could come back to bite you.