@TomD8 wrote:
Q: @dbet2256 asked: "how does she claim this income with no w2?"
A: In TurboTax, she would navigate to the Less Common Income section of Personal Income, and then select "Miscellaneous Income, 1099-A, 1099-C". On the page that opens, she'd select "Other income not already reported on a Form W-2 or Form 1099", and then proceed through the step-by-step questions.
This is complicated. Reporting the income as "other income" relies on the idea that caring for your own grandchild is more like a hobby and less like an "ongoing trade or business" to be self-employed. She would pay income tax on all the income and can't deduct related expenses, but would not pay self-employment tax.
I haven't seen any IRS rulings or tax court cases that would say one way or the other whether a grandparent should file this kind of income as a hobby or as self-employment, so be aware there is the possibility that the IRS will disagree if she reports it as "other income" and not self-employment.
