Yes, she has to pay tax on the income if she is required to file a tax return. It would be household employee wages if the care to place in the child's home. If it took place in the grandparents home then it would be self-employed income. Either way it is taxable income to her.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
