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How do I enter income for babysitting my grandchild? IRS publications says I don't need to pay SS or Med tax. How do I enter the income and just pay the appropriate tax?

 
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Accepted Solutions
Coleen3
Intuit Alumni

How do I enter income for babysitting my grandchild? IRS publications says I don't need to pay SS or Med tax. How do I enter the income and just pay the appropriate tax?

If you received a W-2, then enter it following the steps below. This is the only way you would be able to avoid those taxes. If you did not receive one, you would be considered self-employed and you would be responsible for all the taxes.

Social security and Medicare taxes do apply to payments made to a parent for domestic services if all of the following apply:

  • The parent is employed by his or her son or daughter;
  • The son or daughter (the employer) has a child or stepchild living in the home;
  • The son or daughter (the employer) is a widow or widower, divorced, or living with a spouse who, because of a mental or physical condition, can't care for the child or stepchild for at least 4 continuous weeks in a calendar quarter; and
  • The child or stepchild is either under age 18 or requires the personal care of an adult for at least 4 continuous weeks in a calendar quarter due to a mental or physical condition.

Payments made to a parent employed by his or her child aren't subject to FUTA tax, regardless of the type of services provided.

From <https://taxmap.irs.gov/taxmap/pubs/p15-002.htm>

To enter Wages and Salaries (W-2)

•        Click on Federal Taxes (Personal using Home and Business)

•        Click on Wages and Income (Personal Income using Home and Business)

•        Click on I'll choose what I work on (if shown)

•        Scroll down to Wages and Salaries

•        Click the start or update button

 


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1 Reply
Coleen3
Intuit Alumni

How do I enter income for babysitting my grandchild? IRS publications says I don't need to pay SS or Med tax. How do I enter the income and just pay the appropriate tax?

If you received a W-2, then enter it following the steps below. This is the only way you would be able to avoid those taxes. If you did not receive one, you would be considered self-employed and you would be responsible for all the taxes.

Social security and Medicare taxes do apply to payments made to a parent for domestic services if all of the following apply:

  • The parent is employed by his or her son or daughter;
  • The son or daughter (the employer) has a child or stepchild living in the home;
  • The son or daughter (the employer) is a widow or widower, divorced, or living with a spouse who, because of a mental or physical condition, can't care for the child or stepchild for at least 4 continuous weeks in a calendar quarter; and
  • The child or stepchild is either under age 18 or requires the personal care of an adult for at least 4 continuous weeks in a calendar quarter due to a mental or physical condition.

Payments made to a parent employed by his or her child aren't subject to FUTA tax, regardless of the type of services provided.

From <https://taxmap.irs.gov/taxmap/pubs/p15-002.htm>

To enter Wages and Salaries (W-2)

•        Click on Federal Taxes (Personal using Home and Business)

•        Click on Wages and Income (Personal Income using Home and Business)

•        Click on I'll choose what I work on (if shown)

•        Scroll down to Wages and Salaries

•        Click the start or update button

 


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