Get your taxes done using TurboTax

It is not self employment in your situation. A parent is an exception to the household employee tax requirement (so called "nanny tax"). But the income IS taxable to your parent(s), particularly if you plan to claim the child and dependent care credit.  You must use their SSNs and address. Since it was done in your daughter's home, then they should follow the procedures provided below.

1. Click on Wages and Income
2. Scroll down to Less Common Income
3. On Miscellaneous Income, 1099-A, 1099-C ... click the start button
4. On the next screen click the start button on Other Income not already reported on Form W-2 or Form 1099
5. Answer Yes on the next screen and enter the amount under Household Employee Wages. Enter the full amount they are claiming as a child care deduction even though the screen says enter only if less than $2,300 (being the taxpayer's parent waives the $2,300 limit).
6. TurboTax will put the income on line 1 of form 1040 with the notation "HSH". This income is earned income and would qualify for the Earned Income Credit (if you're under 65) and for making an IRA contribution.
7. See the image below.

Wages not counted.  (IRS Publication 926)