Q1. I need to generate W2 for her as household employee ..staying with me and she would need to use w2 for her tax file for HealthCare Marketplace Eligibility. In that case do I need EIN to generate W2 for her?
A1. I'm not knowledgeable about HealthCare Marketplace Eligibility. You may have to post a separate question for that.
As to reporting, the household employee income, she does not need a W-2. See below on how to report.*
Q2. I understood I do not have to worry about medicare and ss tax amount as a household employer [nanny tax] . Am I correct ?
A2. Yes. Grandparents are exempt. See exception on page 6 at https://www.irs.gov/pub/irs-pdf/p926.pdf
Q3. Can I include the payment I made to my mom in form 2441 as Child and Dependent Care Expenses?
A3. Yes
*In TurboTax, enter at:
Federal Taxes
Click on Wages and Income
Scroll down to Less Common Income
On Miscellaneous Income, 1099-A, 1099-C click the start button
On the next screen click the start button on Other Income not already reported on Form W-2 or Form 1099
Answer Yes on the next screen. On the net screen, enter your income as Household Employee Wages (ignore the $2700 limit, it doesn’t apply to grandparents) and continue the interview until it completes.
The income goes on line 1b of form 1040 ("Household employee wages not reported on Form(s) W-2").
