Hi! I babysat my grandbaby in my home for short periods of time in 2023 and was paid $800. It is not my full-time job. Under the turbo tax info, it says it can be put on 1040 line 21 but how do I get it there? I don’t see questions in the software that will put it in that spot and if this is even how to do it. I am not employed by my daughter and I am not self-employed as a sitter.
Typically if you are providing child care services in your home for payment, you have a "babysitting" business. The income would be entered in the self-employment topic. You would pay income tax and self-employment taxes on that income. You could also enter any expenses you might have that offset that income.
Having said that, this also appears to be a non-taxable gift from your daughter for $800. This would not need to be reported on your tax return.
The amount is under the limit for gift tax reporting so you daughter does not need to report it either.
However, if your daughter is not gifting the amount and is in fact considering you her child care provider and listing the payments to you in order to claim the dependent and child care tax credit on her tax returns, then it is income to you for your childcare business.
In the "Wages & Income" section scroll to "Self-employment" and start the topic. You will be able to enter income and expenses for your child care business.
Thank you!
How does it work if using the dependent care withholding from a paycheck?
If your daughter paid you with funds from her Dependent Care FSA she would have to report the payment to you on her tax return and list your social security number. If that is the case, you would need to report the income as self-employment as described previously by DMarkM1.