Will my daughter be required to pay income taxes on babysitting money if I claim it on my taxes as a credit?

Question

She is only 12 years of age and I paid her a total of $1560.00 last year (filed an extension - lol) for afterschool watching and school holiday watching and summer care. ($30-50 per week depending). So she paid no taxes. Is she required to file if I list it on my taxes with her SSN? Thanks for any help out there.

Answer 1

If you are deducting the amount you paid her as child care expense you better consult a tax professional. I doubt that family members qualiy as employees. As an employee there are many other taxes involved that would easily offset any tax savings. Social security and medicare taxes for one.

Answer 2

With an earned income of less than $4720, unless your daughter had an unearned income of $250 or more. she is not required to file a tax return. (Her taxable income after standard deduction and personal exemption would be $0). I assumed you can still claim her as a dependent. If you can't, the limits are higher.

You can't claim the child care credit if the daughter that you paid is your dependent or it under 19. See the IRS links below.

In addition to the conditions just described, to take the credit, you must meet all the following conditions:

1. You must provide the taxpayer identification number (usually the social security number) of the qualifying person.
2. Your filing status must be a status other than married filing separate (You must file a joint return if you are married.)
3. The payments for care cannot be paid to someone you can claim as your dependent, or to your child who is under age 19 even if he or she is not your dependent.
4. You must report the name, address, and taxpayer identification number, (either the social security number, or the employer identification number) of the care provider on your return, unless the care provider is tax exempt. You can use Form W-10 (PDF), Dependent Care Provider's Identification and Certification, to request this information from the care provider.

Answer 3

I'm not sure if it is more disturbing that he is trying to use paying his own child to watch another child as a tax deduction or that he is allowing a 12 year old to baby sit a younger child anyway. Leaving a 12 year old home alone on school holidays and summer vacations is already iffy enough but having a 12 year old in charge of even a younger child home alone for long periods of time would be considered child abandonment in many counties or cities.

Answer 4

child care expenses have to be provided by someone 18 or older. So you cant claim that expense as a deduction. She didnt make enough to have to pay any tax on her income.