Do I have to pay taxes on what I get paid for watching my friends child?

I watch my friends 2yr old 5 days week 10 hrs or more a day..she pays me $80.00 a week for this and deducts for days she misses and holidays. The average daycare around here is between $105 to $120 a week. So recently I told her in couple weeks I was gonna change it to $90 a week and that she would have to pay whether or not she comes or if there was a holiday. And her reaction to this was ';Well if I have to pay every week then I want to claim this on my taxes so I get a deduction.'; So I would like to know what I would have to pay on my taxes to do this?...or how do I file this the end of the year and what do I have to do? And more importantly is it worth watching her anymore?? Thanks