Deductions & credits


@octovia225 wrote:

Do I still need to issue her a W2? 


If you pay someone to work in your home, more than $2200, you are required to issue a W-2.  Because the person is your parent, you are not required to withhold tax or pay household employee's tax.   There are a few places online you can e-file a W-2 for a small fee, or you can register an account with the social security administration and file it for free.  (After issuing all your W-2s -- presumably this is the only one -- you also file a form W-3 with the government which is a summary of all your W-2s.  Just follow the online instructions carefully.)

 

If the person worked in their home, they are an independent contractor.  You don't give them a 1099 or a W-2, but you will need their social security number to claim the credit, and the IRS will be looking to see if they report corresponding business income on their tax return.