I babysit one child in my home. Do I add that amount to my income.

If you are not an employee that is your employer is not withholding SS tax and Medicare tax, then you are self employed.
You must file your tax return if your self employed income is $400 or more. You will report your income and expenses on schedule C or C-EZ (Form 1040). This income is subject to SE tax at 15.3%. Read: Your U.S. Tax Return: Tax Filing by Self Employed Sole Proprietor or Independent Contractor (http://taxipay.blogspot.com/2008/04/tax-filing-by-self-employed-sole.html)