If you paid someone $5,000 to babysit your children you would need to issue them a W-2 and include Schedule H with your return, if this is their principal occupation, then they are a household employee regardless of how old they are. Also, if you paid them over $2,600 you should have been withholding and paying social security and Medicare taxes on this person.
If this is not their principal occupation, since they are under 18, (Ex. they are a student), then you would not need to issue a W2, pay employee withholding taxes or file the Schedule H. Since they are 18 now, if you pay them more than $2,700 to babysit this year, you will need to pay household employee taxes, issue a W-2 to them and file a Schedule H.
Either way, they would need to report the income on their own return. Their parents cannot claim the income on their return.
Also, if you are trying to claim the child and dependent care credit, you will still need to add their name, address and social security number to form 2441 to claim the credit.
@Taxesarewild997 (Edited 2/8/24 @ 10:10AM PST)
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