@Vanessa A wrote:
Yes and her wages would be the Fair Market Value of the housing she is provided.
However, if you are going to treat her as a household employee for purposes of claiming the dependent care credit, you must issue her a W-2 for her wages (or value of housing in lieu of wages), and pay household employer's tax on her wages. And your aunt may have to report her W-2 wage income and pay tax on it, depending on her other tax circumstances.
You can't list her as a care provider without her SSN, and the IRS will be looking for a matching tax return from her.
The household employee taxes you have to pay will largely offset the dependent care credit, and could even exceed the dependent care credit depending on your overall income and the amount of wages you assign to your aunt. It's probably more trouble than it's worth. Just say she lives with you and helps out. She doesn't pay rent, you don't pay a salary, and you don't claim the credit.
https://www.irs.gov/businesses/small-businesses-self-employed/hiring-household-employees
https://www.irs.gov/taxtopics/tc756
https://turbotax.intuit.com/tax-tips/irs-tax-forms/what-is-schedule-h-household-employment-taxes/L7X...
