In order to qualify for the Child and Dependent Care Credit, you must:
- Pay expenses for a qualifying individual (a child or dependent) to enable you or your spouse to work or actively look for a job .
- Have earned income. Earned income is money you earned from a job. However, income from an investment or dividend does not qualify as earned income.
- Provide the care provider’s information on your tax return. This includes name, address, and their social security number (SSN). In order to claim the expenses you pay your provider, the provider can not be your spouse, a parent of the dependent child, another dependent claimed on your tax return, or your child who is age 18 or younger (even if they are not claimed as a dependent on your tax return).
The payment to your mother would be taxable income to her. Assuming that the payment were self-employment income, a taxpayer would have to file an income tax return if the net earnings from self-employment were $400 or more.
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