If she babysat in your home, instead of hers, she is classified as a household employee. The income is reported on line 1 of form 1040, with the notation HSH to the left of line 1. To enter type> household employee income <in the find box of Turbotax.
If the grandparent babysits in her own home, she reports the income as self employment, on Schedule C, then line 12 of form 1040 (Schedule 1). Type> self employed income <in the find box.
