Thanks for the detail - that's helpful!
"probably self employed" - i am still pretty sure this applies to if you are running a business of babysitting - whether you are babysitting relatives/ friends etc.
"In one case, the Tax Court held that grandparents who provided care only for their own grandchildren and received payments from a state-sponsored childcare assistance program had to pay income tax on the payments, but the payments were not subject to self-employment tax because the grandparents’ primary purpose in providing the care was not to make a profit."
I think the main point here is not that the grandparent was paid state sponsored childcare but that the tax court ruled that the grandparent was not in it to make a profit which disqualified self-employment tax. I'll probably end up asking a tax lawyer just to confirm.
The original link i posted referred to a tax court ruling:
here is a tax book that refers to it too. https://books.google.com/books?id=dl_SDwAAQBAJ&pg=PA770&lpg=PA770&dq=state+assistance+grandparent+ta...
