What to do to get earned income credit for caregiver

Laehhiday
Laehhiday Member Posts: 3 Newcomer
in Credits/Deductions

I was the primary caregiver for my terminally ill father for 6 months in 2025 and as insurance and hospice did not help much and since he needed 24-ht care and supervision before he passed, I was not working my normal job. My parents paid me around 7200 total (about 1200 a month) out of their pocket to make up for my lost income. When I put this under “other income “ it doesn’t show up as earned income on deductions and credits but it was very much earned. What should I do about this while making my moms life (and mine as I do their taxes) easier and she can claim out of pocket medical expenses but not have to pay employee taxes or anything like that?

Best Answers

  • MatthewD
    MatthewD FreeTaxUSA Admin, FreeTaxUSA Agent Posts: 710 image
    Answer ✓
    Hello Laehhiday,

    In your situation, this income would be categorized as self-employment income, subject to self-employment tax and reported on a Schedule C. That way it would be categorized as earned income for the earned income credit and allow you to deduct expenses related to earning that income. For example expenses might include, supplies you purchased for caring for your father, miles driven on your car to run errands, etc. Your parents, who paid you, would not pay the employment taxes, you would pay the full amount as self-employment tax.

    If you have additional questions, consider asking Customer Support on your account. You also have the option of adding Deluxe to do a live chat or Pro Support to get help from a Tax Pro.
  • kiarab
    kiarab FreeTaxUSA Agent Posts: 150 image
    edited January 6 Answer ✓

    Hello again,

    Not necessarily. The instructions for the form says "File Form 1099-NEC, Nonemployee Compensation, for each person in the course of your BUSINESS to whom you have paid the following during the year."

    https://www.irs.gov/instructions/i1099mec

    Since your mother was not in the business of providing care to others, her payments are not required to have a 1099-NEC/MISC filed. Her payments were personal.

    As for yourself, you do not need a 1099-NEC/MISC to claim the income on a Schedule C. There will be a section in our software for income not reported on those forms. It will come soon after we ask you if you have received a 1099-MISC/NEC.

Answers

  • Laehhiday
    Laehhiday Member Posts: 3 Newcomer

    but in that case, I would have to file a 1099 from her to me correct? How would I do that and it would not cause anything negative for her right ?

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