Hiring your mom to baby-sit can save you money and give you peace of mind. Her services might also be tax deductible. If your child is under 13 and your mom baby-sits while you work or look for work, you can use her fees to qualify for the Child and Dependent Care Credit. However, if you want to avoid getting in trouble with the Internal Revenue Service, you and your mom have to be eligible under the tax code before you try to recoup some of those baby-sitting expenses.
The exact value of your Child and Dependent Care Credit depends on your income, but it can be as much as 35 percent of your mom's baby-sitting bills. If your employer provides child-care benefits, you'll have to deduct them from your expenses before you determine your credit. You'll also need to deduct any baby-sitting fees you paid Mom for outings that weren't work related, though you can claim non-work-related expenses incurred during vacations, holidays or while you were sick as long as the expenses weren't for more than two weeks.
Qualifying for the Credit
Because you can only claim baby-sitting expenses that were required so you could work or find a job, you must have earned money during the fiscal year to write off your baby-sitting costs. If you're married and file jointly, your spouse must have also earned income, though you may still be able to receive the credit if either you or your spouse were disabled or a full-time student during the tax year. You are only eligible for the credit if your filing status is single, married filing jointly, head of household or qualifying window or widower with a dependent child.
Paying Your Mom
You can't apply the credit if you pay your spouse, your child's other parent or someone who is under 19 to baby-sit. However, you can receive the credit for money paid to your mom as long as she isn't your dependent. If you paid for more than half of your mom's support during the fiscal year, you can claim her as a dependent and qualify for a tax exemption, but you can't claim a credit for the money you paid her to baby-sit.
If your mom came to your house to baby-sit, you might be considered a household employer. If the IRS considers you a household employer, you'll have to pay additional taxes, including Medicare, unemployment and Social Security taxes. However, if your mom considers herself an independent contractor and not an employee, you won't owe taxes on her wages. A tax expert can help you better understand what you can do to avoid being considered a household employer, but if you're concerned, asking mom to baby-sit at her place will solve the problem.
- IRS: 10 Things to Know About the Child and Dependent Care Credit
- New York Times: When You Can Claim a Credit for the Babysitter
- Fox Business: How to Deduct Child and Dependent Care Expenses
- TurboTax: Can You Claim a Parent as a Dependent
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