What happens when you do both?
* You agree to watch a child in your program on Saturday night while the parents go to a movie. You provide the care in your home or in the child's home.
* Your teen-age daughter agrees to "babysit" for one of the children in your care on Friday night. She provides this care in your home and sometimes in the child's home.
* A child in your program has a "play date" with one of your children on Saturday afternoon in your home.
What are the licensing, insurance, and tax issues that could be involved in these "babysitting" scenarios?
Before you or your teen-age daughter "babysit" for a child, check with your child care licensor. Some state child care laws forbid such activities. Other state laws say that you must follow all licensing laws during these times. This could mean that your teen-age daughter would have to meet the same licensing requirements as you before she could "babysit."
Whenever you provide care outside of your regular licensing hours, you should inform your business liability insurance agent. You want to be certain that you (or your teen-age daughter) are covered in these situations. Extended hours, care for former clients or care offsite may or may not be covered by your current policy. If a child is injured while you are "babysitting" you can be held liable. It doesn't matter if you are not be paid to care for the child or if the child is no longer enrolled in your program. If you are doing this in violation of child care licensing rules, your potential liability increases.
What if you get the parent to sign a "hold harmless" statement in which the parent promises not to use you if their child is injured while you are "babysitting?" I don't believe such liability waivers will hold up in court, so I don't recommend that you use one.
Any money you earn in these situations is business income and should be added to your regular income. Expenses such as food during these occasions are business deductions. Money your teen-age daughter earns is not taxable income if she is under age 18 and earns less than $5,800 (2011).
Sometimes "babysitting" is not such a simple activity!
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