We claim our mother in law as a dependent in 2018 tax return. We paid her $3900 for baby sitting. She received SSA-1099 $4464. Should we file her 1099/claim her/ $ paid.

[esu35k]

The questions are:(1) should I use her SSA-1099 and file her tax return for the first time. She is 66years old.
(2) Should I still claim her in my Tax return and include the amount $3,900 we paid her for babysitting?

[CherylW · Accepted solution]

1)  If the only income she has is her SSA-1099, she does not need to file.  Even though you paid her to babysit, that amount is under the filing limit.

2)  You could claim her, but you can't take the credit for child care expenses.  And if you do claim the credit without her filing a return, the IRS tries to match up credits with income of the caregiver.

If she babysits in her separate home, she will have to file a Schedule C and SE.

The following, from the Instructions for Form 2441, explains why you can't claim the child care credit:

The person who provided the care wasn't your spouse, the parent of your qualifying child, or a person whom you can claim as a dependent.