@pasknyc wrote:
I was referring to this paragraph on the IRS website. How is my situation different?
https://www.irs.gov/businesses/small-businesses-self-employed/family-caregivers-and-self-employment-...
Q 2: Must a taxpayer pay self-employment tax on the income received from a state agency to care for his grandchildren so that his daughter can work? Taxpayer doesn't have a day care business or look after any other children. Taxpayer receives Form 1099-MISC from the state agency with the amount paid shown in Box 7 as nonemployee compensation.
A 2: No, the taxpayer does not owe self-employment tax on amounts reported on the 1099-MISC he received from the state agency if he is not engaged in a trade or business of providing day care services, as appears to be the case in this situation. The taxpayer must report the full amount of the payment on line 7a, Other Income, of Form 1040 or 1040-SR.
Are you saying that *you* are not paying your parent but a "state agency" is? That section is for children removed from the parents and placed by the state in a care givers care.
That is not what your question said. That entire reference does not apply to a grandparent baby sitting your child that you are paying for.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
