Is wife a 1099 or w2? Sporadically watched an acquaintance’s kids. Paid 2775 in total. It seems like they plan to count us as a business expense they’re freelancers).

Your spouse has self-employment income.   The child's parents do not have to issue a W-2 or a 1099.  But they will need your spouse's Social Security number or her Tax ID in order to get the childcare credit.  They can take that credit if they paid her to care for their child so they could work.  If she does not want to give out her SS number she can get a Tax ID from the IRS and give them that number to use on their tax return when they claim the credit.   

https://www.irs.gov/individuals/individual-taxpayer-identification-number

Your spouse will need to pay self-employment tax for Social Security and Medicare.  If she has any expenses she can prepare a Schedule C.   There are often expenses incurred by nannies and babysitters that can be claimed on the Schedule C.

https://ttlc.intuit.com/questions/2926899-how-does-my-side-job-affect-my-taxes

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/26653

https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

https://ttlc.intuit.com/questions/2902389-why-am-i-paying-self-employment-tax

https://ttlc.intuit.com/questions/1901340-where-do-i-enter-schedule-c

https://ttlc.intuit.com/questions/3398950-what-self-employed-expenses-can-i-deduct

https://ttlc.intuit.com/questions/1901110-do-i-need-to-make-estimated-tax-payments-to-the-irs