General Question

lilakess's avatar

Will my babysitter have to pay taxes on her babysitting money if I claim her as childcare on my taxes?

Asked by lilakess (779 points ) April 4th, 2009

Not sure what to do? Looks I can get a refund if I do so (and it’s true, she is childcare, but I don’t want to get her in trouble. I doubt she will be claiming that as income.

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23 Answers

Judi's avatar

That’s why they ask for social security or taxpayer ID#.

casheroo's avatar

I’m pretty sure you had to have given her a tax form, when she started working for you…maybe a 1099 as an independent contracter. Or a W2. I’m not familiar with tax stuff though.
I’d say you’d both get in trouble, if you tried to claim it. You should have been paying taxes on what you paid her, and so should she.
i could be wrong though

AstroChuck's avatar

If she makes enough to file, you bet.

jca's avatar

yes. you should have discussed this w/ babysitter when she started. my babysitter is off the books. however, she’s cheaper than a daycare center, which would be on the books, a deduction for me but more expensive week to week.

La_chica_gomela's avatar

It depends also on how much money she makes per year. You should look into the exact number, but I think its about $4000—if a person makes less than that, they don’t have to claim it.

casheroo's avatar

Also, you can’t 1099 her, if you didn’t have a contract. You can’t make her pay all those taxes without a contract. You screwed yourself here, it seems. Also, good luck trying to find a babysitter willing to pay all the taxes, while you don’t.

Judi's avatar

@casheroo
If she took your children to the babysitters house, she is not responsible for deducting taxes from her pay. If she came into her home and worked exclusively for her then she could be. The IRS does not concern itself with enforcing labor laws, just collecting taxes from people who got money.

MrItty's avatar

What you claim is irrelevant. She is employed, she has a job, she has to claim her income. Her tax return is not dependent on yours.

Randy's avatar

When I was younger, I worked on a dairy farm for cash. My boss informed me that if he paid me a certain amount, I want to agree with @La_chica_gomela about it being around $4000, that he could claim me on his taxes and that he would which would cause me to have to pay. I quit not long after that if that tells you anything about how an employee will see it.

lisaj89's avatar

Well, I don’t know about any of the legal stuff but if you want to keep her as your babysitter I wouldn’t. If you surprise her with the fact that she has to pay taxes on the money she has earned, forget it, she’ll be out of there at a moments notice. There are plenty of babysitting jobs out there. Plus, that’s just wrong!

Judi's avatar

wrong to pay taxes? I thought taxes and death were the only certainties in life.

lisaj89's avatar

What I mean is I would think she would have to fork over some of the cash which she earned through out the year if she made enough? Since it was not brought up prior to the services provided, I do not think it is right. It’s kind of an unspoken agreement that babysitting money is paid “under the table”.

Judi's avatar

I would think that the unspoken agreement would be that everyone was legitimate and above board. Humm…. It’s been a long time since I had to pay a babysitter, but I always took the childcare deduction!

AlfredaPrufrock's avatar

If you have someone come to your home and work for you, you are required to withhold taxes, and pay in medicare, social security, etc. If you do not do this, then you cannot deduct child care expenses on your taxes. You are supposed to be doing this.

Judi's avatar

Unless you are paying so
Someone in THEIR home.

jca's avatar

Judi: i may be mistaken but i believe you are incorrect about the location where the labor is performed (your home or babysitter’s home being irrelevant). I believe that the IRS considers it taxable no matter where.

However, I think that if the parents did not discuss with the babysitter that this will be taxable, it would piss her off to now be told that was taxable income. She might have wanted more per hour if she knew there would be taxes deducted. Perhaps a good compromise in this case would be for the parent to discuss it, and if he wants to declare it, he should tell babysitter that going forward, he will be declaring it, and she may at that point tell him she wants more per hour.

Judi's avatar

It is taxable, no matter where it is performed, but the question is who is responsible for withholding ans social security taxes. If the caregiver is a private contactor, offering her services in her home to various people then she is responsible. If the babysitter is hired exclusively for the askers children and that is their agreement then the asker is responsible. Even if the asker did not withhold the taxes it does not relinquish the babysitter from the responsibility to pay taxes on the money earned.

thedoc's avatar

Why would people answer a tax law question if they have no idea of the answer. The irs have very specific rules regarding misc baby sitting (not reg day care) called the baby sitting rule. You can look it up at their site. You do not have to withhold taxes if she made less than 1800 for the year. She pays state and federal taxes if her adjusted gross is above certian limit. No S.S. or medicare on the misc baby sitting income. Never guess when it comes to Tax law look it up.

jca's avatar

it’s true there are specific laws, but it seems this issue for the writer is more about whether or not the babysitter expected this to be off the books. legal, no, but done all the time, done with cleaning people, nannies, people who mow the lawn, etc.

Judi's avatar

But you can’t take a deduction for paying the gardener or the housekeeper.

crazylady1978's avatar

I have a question for someone in hopes of an answer… If I babysit my neice and nephew (4 months old) and I turn the income into federal and state like if I was working at a store or what not can I file my own taxes and still get my earned income? do I have to be lic since I am babysitting family? what is the percentage of taxes I should pay quarterly? Thanks much

Td5552's avatar

Really? No there I a minimum amount that does not require you to claim income. If you go over that $4000 then you by law need to pay taxes. $4000 a year is not enough to live on so even if you needed to pay ay the end of the year on $4000 income the person would not be able to afford it. So therefor the tax bracket starts at $4000

lvillan's avatar

You don’t have to issue a Form 1099-MISC to a babysitter no matter how much you pay the sitter. Here are the rules:

IF THE SITTER WORKS IN YOUR HOME:
If you hire a sitter 18 or older to care for your kids in your home and you control how and when she does her job, then you must treat the sitter as an employee and issue Form I-9 and W-4 when you hire her. You must also withhold FICA taxes each pay period, but you’re not required to withhold federal income taxes. You must issue the sitter a W-2 at year end and file employment tax returns quarterly (i.e. Form 941) and pay the employer’s share of the FICA taxes.

IF THE SITTER WORKS OUT OF HER HOME:
The sitter must report what you pay her on Schedule C where she can also deduct expenses related to her service.You do not have to issue Form 1099-MISC because you are not paying the sitter the COURSE OF YOUR TRADE OF BUSINESS. In other words, if you own, say a pizza restaurant and hire an unincorporated window washer (an independent contractor) and pay $600 or more to the window washer, then you would issue Form 1099-MISC because you paid for the service in course of your trade or business.

To get the Child Care credit, you need the sitter’s name, address, social security number (or Federal Tax ID, if she has one), and the amount you paid her for the year. You get the credit on Form 2441.

In any event, you don’t have to issue Form 1099-MISC.

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