A grandparent babysitting a grandchild in their home

[lincolnhester88]

Specifically, where does a grandparent report 8000.00 made babysitting a grandchild in the granchild's home in turbotax?

[bosso3]

Here is a Turbotax answer from 2019.  I believe it still applies.

ttlc.intuit.com/community/taxes/discussion/how-do-i-report-the-income-i-made-watching-2-children-in-my-home-when-i-file-my-tax-return/00/32392

Copy and paste it into your internet browser.

The fact that you did the work in their home does not affect you.  It may affect the children's parents ability to take a child care credit.

Also, if you use Turbotax Desktop, you can use it to file Schedule C - Profit or Loss from Business. 

I'm not sure which online Turbotax version you need for Schedule C.

I hope this helps.

[PattiF]

You can report the $8000 as other income, not as self-employment 

Follow these steps:

1. Open or continue with your return
2. Click on Show more next to Less Common Income under the Income & Expenses section
3. Click on Start/Revisit next to Miscellaneous Income, 1099-A, 1099-C
4. Click on Start next to Other reportable income.

From the IRS Publication 926, the Holdhold Employer's Tax Guide. 

Wages not counted.

Don't count wages you pay to any of the following individuals as social security or Medicare wages, even if these wages are $2,400 or more during the year.

1. Your spouse.
2. Your child who is under the age of 21.
3. Your parent. Exception: Count these wages if both the following conditions apply.

• Your parent cares for your child (including an adopted child or stepchild) who is either of the following.

1. Under the age of 18.
2. Has a physical or mental condition that requires the personal care of an adult for at least 4 continuous weeks in the calendar quarter services were performed.

@lincolnhester88

[bosso3]

I am not an expert, and I don't often disagree with the tax experts, but I need to point out that @lincolnhester88 listed an edited and incomplete version of the text from Publication 926.  Following the link in their response the  complete text is listed below and is available via their link. 

NOTES: 

1)  Publication 926 is titled, and  intended,  for the "Household Employer's Tax Guide", although I agree that it may also useful for the household employee. In this case, the grandparent is the household employee and the baby's parent is the household employer.

2)  The text listed by @lincolnhester88  is under the topic of "Social Security and Medicare Taxes" and regards whether or not the household employer (in this case the parent of the child being babysat) needs to withhold Social Security and Medicare Taxes from the payments to the household employee (the grandparent).

The complete relevant portion of the text previously mentioned follows:

Regarding Social Security and Medicare Taxes

"Wages not counted.

Don't count wages you pay to any of the following individuals as social security or Medicare wages, even if these wages are $2,400 or more during the year.

1. Your spouse.

2. Your child who is under the age of 21.

3. Your parent. Exception: Count these wages if both  the following conditions apply.

   1. Your parent cares for your child (including an adopted child or stepchild) who is either of the following.

      1. Under the age of 18.

      2. Has a physical or mental condition that requires the personal care of an adult for at least 4 continuous weeks in the calendar quarter services were performed.

   2. Your marital status is one of the following.

      1. You’re divorced and haven't remarried.

      2. You’re a widow or widower.

      3. You’re living with a spouse whose physical or mental condition prevents him or her from caring for your child for at least 4 continuous weeks in the calendar quarter services were performed.

4. An employee who is under the age of 18 at any time during the year. Exception: Count these wages if providing household services is the employee's principal occupation. If the employee is a student, providing household services isn't considered to be his or her principal occupation."

NOTE:  An important consideration in this case is item 3,2, above - regarding the baby's parent's marital status.  As I read this, the listed marital status situations must (also) be met to exclude the need for Social Security and Medicare Taxes withholding by the baby's parent.

I welcome responses from others.

[LeonardS]

This IRS reference below shows that a grandparent babysitting a grandchild in their home can be considered a household employee or an independent contractor based on how the parties involved want to report the babysitting.

"...Question

I'm thinking of paying a family member to babysit for my two-year old child while I work. May I claim this cost as a childcare expense even though my family member isn't a registered daycare provider? Who's responsible for paying employment taxes on the money I pay for this care?

Answer

These payments may be qualified childcare expenses if the family member babysitting isn't your spouse, the parent of the child, your dependent, or your child under age 19, and if you otherwise qualify to claim the child and dependent care credit.

Who's responsible for paying employment taxes on these payments depends on whether your family member is your employee or is self-employed (an independent contractor)."...

IRS https://Child and Dependent Care