Maybe.
If the parents are claiming the dependent care credit, based on what they paid you, then you definitely need to report the income.
You are not necessarily required to report this as income. It depends on the facts and circumstances. If the parents legitimately hired the grandparent for specified pay, it is reportable. Often grandparents will do it for free, and the parent will often show their gratitude by giving the grandparent a gift. Then it's not reportable.
How you report the income, depends on where you "worked". If you worked in the parent's home, you are a "household employee" and as the parent of the parent are exempt form FICA (social security and medicare tax). If you worked in your home, you do need to report it as self employment income.
In TurboTax, to enter household employee income:
Federal Taxes
Click on Wages and Income
Scroll down to Less Common Income
On Miscellaneous Income, 1099-A, 1099-C click the
start button
On the next screen click the start button on
Other Income not already reported on Form W-2 or Form 1099
Answer Yes on the next screen and continue the
interview until it completes. Ignore the statement about under $2100; you are an exception.
TurboTax puts the amount on line 1 (wages) of
form 1040 (line 7 prior to 2018) with the notation “HSH”. It is considered earned
income.
