I am a caregiver for an elderly lady. Do I have to include this income on my tax returns as income?

Unfortunately the amount paid where the employer must start withholding taxes and in certain tax categories pay a matching amount themselves, is quite low - $1,900 in a calendar year or $1000 if that amount is already reached in one calendar quarter. If the employer isn't withholding taxes it is recommended the employee do it themselves in a "self-employed" fashion, which is a pain in the rear as you have to pay quarterly an estimated amount. There is s big benefit to you in having taxes withheld and that is the ability to file for unemployment should you need it. Regardless of whether you report or not, you and the employer should be in agreement as the easiest way to get busted is if one reports and the other does not. Don't look for the employer to sign any kind of waiver as you'd be asking her to document and noterize her commiting a crime. And the penalty for not making proper payroll deductions can be very steep. I'm sure there are thousands and thousands of caregivers, nannys, housekeepers all over the country being paid under the table - I imagine few are ever caught but you do hear on occassion, of some rich person looking at a political career getting busted for not properly paying their nanny or maid - so it does happen.

Is it possible to get her to sign a waiver of ever using my income . A notarized letter that I can keep in case this comes up? I'm not trying to get out of paying taxes, but the small amount that she is paying me wouldn't be worth the hassle. Is there a yearly amount that she would be liable to claim? she doesn't know much about it either. I am "babysitting" her mother while she is at work. Thank you for your comment.

There are several factors to consider. Is the daughter going to use any of what she pays you for any type of deduction on her moms taxes? Do you have another job and/or will the amount you're being paid as a care giving require you to file a return? How big of a risk do you want to take? Too bad it's not straight up cash - no paper trail. If the daughter is not going to use you as a medical/caregiver deduction - if it were me, I might try not reporting it - the check aspect is worrisome however and if caught you might be able to claim ignorance and get out of a penalty but you surely will have to pay the amount owed plus interest if caught. Currently I pay a guy to take out my disable son a couple of times a week. The yearly amount is not enough that I have to treat him as an employee so I don't report it and neither does he.