The parent reports the income on line 1b of form 1040 ("Household employee wages not reported on Form(s) W-2"). Because of the parent exception, the income is not subject to social security and Medicare tax (FICA).
In TurboTax, enter at:
Federal Taxes
Click on Wages and Income
Scroll down to Less Common Income
On Miscellaneous Income, 1099-A, 1099-C click the start button
On the next screen click the start button on Other Income not already reported on Form W-2 or Form 1099
Answer Yes on the next screen. On the net screen, enter your income as Household Employee Wages (ignore the $2700 limit, it doesn’t apply to grandparents) and continue the interview until it completes.
