My mother lives with me and my two daughters. She has no income & does not work. I pay her to provide childcare so, I can work and afford to work. I am claiming her and my 2 daughters as dependents. Will she still need a 1099 form? What exactly will happen if I put in the amount I pay her? Will she have to file?
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Whoa! Don't do that.
You may not claim the child care credit (Dependent Care Credit - DCC) if you paid you dependent to baby sit. If you pay your mother more than $4050 for the year, and she claims it as income, she can no longer be your dependent (her income is too high).
Any money that exchanges hands does not have to be considered income by her. It can be considered a gift and gifts are not taxable.
The only way you can claim the DCC is if you do not claim her as a dependent. If you do decide to do that, she will have to report the income on her tax return. You do not issue her a 1099-Misc. Only businesses are required to issue them. Parents who babysit are exempt from social security and medicare tax (or self employment tax). So, if that is her only income, she will technically not have to file if the amount is less than $10,400. But, if she doesn't there's a small chance of hearing from the IRS, since you claiming the DCC alerts the IRS that she got that income
Whoa! Don't do that.
You may not claim the child care credit (Dependent Care Credit - DCC) if you paid you dependent to baby sit. If you pay your mother more than $4050 for the year, and she claims it as income, she can no longer be your dependent (her income is too high).
Any money that exchanges hands does not have to be considered income by her. It can be considered a gift and gifts are not taxable.
The only way you can claim the DCC is if you do not claim her as a dependent. If you do decide to do that, she will have to report the income on her tax return. You do not issue her a 1099-Misc. Only businesses are required to issue them. Parents who babysit are exempt from social security and medicare tax (or self employment tax). So, if that is her only income, she will technically not have to file if the amount is less than $10,400. But, if she doesn't there's a small chance of hearing from the IRS, since you claiming the DCC alerts the IRS that she got that income
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