How do I file taxes as an Unlicensed Childcare Provider in Michigan?

[RayLeiLay]

I am an Unlicensed Childcare Provider in Michigan for 3 children. My paychecks are issued by the Department of Education but they are issued to the Mother of the children, she has to cash them and give them to me. No taxes aren't removed from each check, so I know I need to pay into taxes.

I believe I am technically her employee but I could also be self employed. Should I have her make a W2 to give to me? or do I file as self employed and enter all the stubs, payment slips and childcare hours?

[xmasbaby0]

If you are providing the childcare in YOUR own home you are self-employed.  If you are working in the child's home you are a household employee.  Where do you take care of the children?

[RayLeiLay]

I care for the children in their home.The checks are issued to the parents and they deposit them and give them to me. Taxes aren't withheld. The Department of Education is sending me an report of the payments that were made to me. Do I file Self Employed with a Schedule C or am I supposed to receive a W2 from the parents because I am a household employee?

[xmasbaby0]

If you are working in their home you are a household employee.  They are supposed to issue a W-2 to you.

[katiepps55]

What would they have done if it was in their home? Only asking because I too am in the same predicament but I watch the children in my home. 

[ZoltanB45]

If you were providing child care in the parent's home,  they would issue you a W-2.

[katiepps55]

Ok, I understand that. But what do you do if you provide the childcare in your own home? 

[DaveF1006]

If you provide the services in your own home, file this as a self-Employed return. 

@katiepps55 

[katiepps55]

Would it be considered section C?

[ColeenD3]

Yes, include your self-employment income on Schedule C.

Follow these steps to go to the Schedule C section of your return:

On the top right corner of TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner).

1. Type in “schedule c” (or for CD/downloaded TurboTax, click Find).
2. Click on “Jump to schedule c”.
3. Click on the blue “Jump to schedule c” link

@katiepps55

[Jporter18]

So I read all these comments but still don't understand. I provided care in their house so I know they have to do a w-2 form. But I got all the money they did NOT take the taxes out so how our they supposed to fill that part out? I got all the money ?? 

[ShirlynW]

The  IRS Publication 926 states, domestic workers working in a family’s home are considered household employees. The difference between employees and an independent contractor is the control of the working relationship. Since Caregivers must come to a family’s home on the days they are told to, work the hours they are told to work and follow the instructions of the family, the family is the employer, and the caregiver is their employee. An independent contractor lets the family know when they can work and comes in when it is convenient for them. An independent contractor completes a job on their terms. As a household employee, you should file your personal income tax using a W-2 and the employer should give you the form by the end of January.

Also, according to the IRS Pub. 926, the household employer rules for federal income tax withholding have not changed. That is, they are not required to withhold federal income tax from wages paid to a household employee. They should withhold federal income tax only if the household employee asks to withhold it and the employer agrees. Employers will figure withholding based on the information from the employee's most recently submitted Form W-4, Employee’s Withholding Certificate.

Any employer that pays any single employee at least $2,400 in the 2022 tax year, or cash wages to all household employees totaling $1,000 or more during any three-month calendar quarter during either the current or previous tax year, the employer must pay Federal employment taxes.

If you employer has not withheld anything from your payments, zeros would be placed in the appropriate boxes. In the future it would be appropriate to make estimated tax payments to the IRS. 

For more information

If an employer hires you as an independent contractor but the IRS considers you as an employee and Social Security and Medicare were not withheld from your pay, you should attach Form 8919 with your personal tax return.

For more information

To complete Form 8919 in TurboTax:

• Sign into your account
• Select “Take Me to My Return”
• Search for “8919”
• Then Click the jump to “8919”