First of all, is your GF the child's bio-mother? If so, then forget your whole plan. You cannot pay the child's parent to be the child's care provider while you work and then get the childcare credit. Or is this your child who has a different parent?
If you are going to claim your GF as a dependent on your own tax return then you cannot also say she is a household employee and get the childcare credit. You cannot get the childcare credit if the childcare provider is a dependent on your tax return.
So.....can you claim GF as your dependent? Did your GF live with you the WHOLE year and earn less than $4300? If so she can be claimed as your dependent and you get the $500 credit for other dependents and the 2021 $1400 3rd stimulus payment for claiming her. And since she is claimed as a dependent she cannot get the stimulus money for herself since dependents are not eligible for stimulus payments.
CREDIT FOR OTHER DEPENDENTS
https://ttlc.intuit.com/questions/4499708-what-is-the-500-credit-for-other-dependents-family-tax-cre...
If you cannot claim your GF as a dependent then if she is a "household employee" you will have to pay her as such, withhold tax, Social Security and Medicare from her wages, etc. just the same as if she were a stranger who comes into your home to take care of your child. Then she has to report the income on her own tax return and pay tax accordingly. And in that scenario your GF cannot be claimed as your dependent. You could get the childcare credit on your return by entering her Social Security number as the childcare provider and reporting the amount you paid her. The amount she reports on her own tax return would have to match.
https://ttlc.intuit.com/community/tax-payments/help/do-i-have-to-pay-taxes-on-what-i-pay-to-my-house...
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
