I believe the answer given above is wrong. For 2014, IRS Publication 926 "Household Employers Tax Guide" finally clarifies the issue around teenage baby sitting as household employees and Social Security / Medicare wages. The income should be reported as Miscellaneous Income.
IRS PUBLICATION 926
Wages not counted. Do not count wages you pay to any of the following individuals as social security or Medicare wages, even if these wages are $1,900 or more during the year.
Your spouse.
Your child who is under the age of 21.
Your parent. Exception: Count these wages if both the following conditions apply.
Your parent cares for your child who is either of the following.
Under the age of 18, or
Has a physical or mental condition that re- quires the personal care of an adult for at least 4 continuous weeks in the calendar quarter services were performed.
Your marital status is one of the following.
You are divorced and have not remarried,
You are a widow or widower, or
You are living with a spouse whose physical or mental condition prevents him or her from car- ing for your child for at least 4 continuous weeks in the calendar quarter services were performed.
An employee who is under the age of 18 at any time during the year. Exception: Count these wages if providing household services is the employee's principal occupation. If the employee is a student, providing household services is not considered to be his or her principal occupation.
