These payments may be qualified childcare expenses if you otherwise qualify to claim the child and dependent care credit. However, you may not count amounts paid to:

• A person who was your spouse at any time during the year;
• The parent of the child;
• A person for whom you (or your spouse if filing jointly) can claim as a dependent; or
• Your child (including stepchild or foster child) who was under age 19 at the end of the year, even if he or she is not your dependent.

Who's responsible for paying employment taxes on these payments depends on whether your family member is your employee or is self-employed (an independent contractor).

• See Publication 15-A, Employer's Supplemental Tax Guide for a general discussion of how to determine whether an individual who is performing services for you is an employee or an independent contractor.
• Special rules apply to family employees generally, and to family employees who perform household work (including babysitting) in your home. For more information on these rules, see Publication 15 (Circular E), Employer's Tax Guide and Publication 926, Household Employer's Tax Guide.
• If your family member is your employee and no exceptions apply, then you're generally responsible for withholding the employee's share of employment taxes and paying the employer's share of employment taxes.
• If your family member isn't your employee, then the family member will be responsible for paying any applicable self-employment taxes on the income earned.