Hal_Al
Level 15

Deductions & credits

Yes. If you claim the credit, she definitely has to file that income. The forms for the credit, that you send to the IRS, with your return, require the amount and her name and SS#.

If you don't claim the credit; it's not so clear whether she has to file, since she is family. You and she can safely treat the money as a gift and not payment for services. 

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