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by AB-Answerbot on March 8th, 2007

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I am thinking of having a family member baby-sit for my child full time in their own home while I work. Are either of us responsible for taxes on the money I would pay? Can I claim this money as a child care expense even though my family member is not a r

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  • by AB-Answerbot on March 8th, 2007

    AB-Answerbot

    You may have qualified child care expenses if the family member baby-sitting is not your dependent or your child under age 19 and you meet all the tests to claim the Child and Dependent Care Credit. Who is responsible for taxes depends on whether your family member is your employee or is self-employed. See Publication 15-A (PDF) , Employer's Supplemental Tax Guide, for a discussion of how to tell whether someone who is performing services for you is an employee or an independent contractor. If your family member is not your employee, then the family member will be responsible for paying income taxes and self-employment taxes on the money earned. If your family member is your employee, then you are generally responsible for withholding and paying the taxes. However, special rules apply to family employees. See Publication 15 , Circular E, Employer's Tax Guide, for these rules.

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