If a family member watches my child do they have to claim the income on their taxes

[sgilman0284]

I have someone who watches my daughter but I don't pay her very much and I was wondering if there was a certain amount they have to claim

[angel55941]

Do they do is like daycare? Do you pay cash? Do you basically just pay for your childs meals while your child is in their care?

[sgilman0284]

I pay cash and she watches her everyday while i'm at work and I pay for most of the food but she buys some stuff

[VolvoGirl · Accepted solution]

Yes you must report all your income no matter how small.  Even $1 of bank interest.  If you don't give them a W2 then they have to file it as self employment income.  And anything over $400 will be taxed.

Do you claim this family member as a dependent on your return?  You can not get the Child Care Credit for paying someone you claim on your return.

[nepher_lorelei]

Being family does not matter.  If they make more than $10,500 per year, they are required to file taxes.

[sgilman0284]

Ive only paid her $5000 so she doesn't have to file/

[nepher_lorelei]

It would depend on if that was her only income.  If its her only income she would not be required to file.  If the total income she makes is greater than 10,500, any additional income, including the 5000 from you, would need to be reported.

[sgilman0284]

Nope only income she has is from me

[VolvoGirl]

Yes she has to file it as self employment income.  Anything over $400 for self employment.  If it was on a W2 she wouldn't have to file it if it's under 10,300 (not 10,500).

[elizgrav27]

What if she's on social security  

[Hal_Al]

@elizgrav27 

How is the baby sitter related to you?  Does she sit in your home or hers?  Do you claim the Dependent Care Credit based on what you pay her? How much do you pay her?  Is she your dependent? 

[SweetieJean]

State filing requirements may be different.