We're going to hire my sister as a nanny for our kids. We want to be able to claim the childcare tax credit, so I'm assuming in order to do that we have to pay certain taxes, and she has to pay certain taxes...just like any other nanny. But I've seen several things that say you DON'T have to pay employment taxes if it's your immediate family. Do we have to pay and withhold employment taxes? Can we claim what we paid her for the childcare tax credit?
