topic Does babysitter report income of less than $400 if I claim the amount under dependent day care reimbursement? in Deductions & credits

Does babysitter report income of less than $400 if I claim the amount under dependent day care reimbursement?

murphyobie — Fri, 11 Dec 2020 18:02:31 GMT

Hello,

I would like to report payments made to a babysitter on my dependent day care reimbursement through my employer. The payments totaled less than $400. Does the babysitter need to report this income on their tax return, since I will be reporting their name and SS# on the dependent daycare reimbursement form and my tax return?

Thank you for your input.

Re: Does babysitter report income of less than $400 if I claim the amount under dependent day care reimbursement?

Bsch4477 — Fri, 11 Dec 2020 19:02:56 GMT

What the baby sitter does is up to the babysitter so you need not concern yourself with that. The babysitter’s reporting depends on various factors such as their other income which contributes to their filing requirement. The under $400 amount refers to the sitter not having to pay self employment tax if that’s the only self employment income.

Re: Does babysitter report income of less than $400 if I claim the amount under dependent day care reimbursement?

Opus 17 — Fri, 11 Dec 2020 19:58:43 GMT

In order to get reimbursed from an FSA, you probably have to provide the name, address and tax number of the provider. The IRS will naturally be looking for matching income on their return.

If care is provided in your home under your rules, they are your household employee and you are required to issue a W-2 and pay household employer's tax if you pay more than $2200 per year.

If you pay less than $2200 in your home, or if care is provided in the provider's home or place of business, you have no other tax responsibilities. How the provider files and what their tax will be depends on their overall financial situation.

Re: Does babysitter report income of less than $400 if I claim the amount under dependent day care reimbursement?

AmeliesUncle — Fri, 11 Dec 2020 23:58:52 GMT

If the babysitter is required to file a tax return, the babysitter needs to report ALL income, regardless if you claim a Reimbursement or not. Not reporting income is tax fraud.

Re: Does babysitter report income of less than $400 if I claim the amount under dependent day care reimbursement?

murphyobie — Sat, 12 Dec 2020 00:08:57 GMT

Thank you for the replies.