My mom lives with us but is not our dependent.
1) Can she be considered as a household employee since she babysit in my house?
2) I'd like to claim this $4000 expense paid to her and get reimbursed from my dependent flexible spending account (FSA). I know I don't need to withhold FICA tax, but do I have to issue w-2? Would there be a penalty of not issue W-2 although no FICA tax needs to be withheld.
3) When I report this expense in my tax return, in addition to report this expense on form 2441 (child and dependent care credit), do I have to fill out houshold employee form or Scheule H? I assume the form 2441 is the only one that I need to put her name in?
Thanks!
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Thank you! My situation is more special as I hired my parent to babysit. I assume the payment threshold would not apply when it comes to fill schedule H?
From the IRS website
https://www.irs.gov/taxtopics/tc756
It says:
About W-2: If you must withhold and pay social security and Medicare taxes, or if you withhold federal income tax, you'll need to complete w2 for each employee.
About Schedule H: If you pay wages subject to FICA tax, FUTA tax, or if you withhold federal income tax from your employee's wages, you'll need to file a Scheudle H.
Since parents are exempt from FICA tax regardless of the $ amount, then no w-2 or schedule H needs to be filed.
Am I right?