No----since she earned only $850 she is not a "household employee," so they are not required to issue a W-2. She was paid in cash with nothing withheld for SS or Medicare and the tax law says she has to pay self-employment tax for that if she earned even $400. When the child's parents use the child tax credit on their tax return they are going to enter her SSN or Tax ID to get the credit. The IRS will be looking for a tax return filed by your daughter that has a matching amount on it. She is going to owe about $130 in self-employment tax.
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