HIRING CHILDREN: Payroll Tax Issues
Children Employed by parents:
Payments for the services of a child UNDER AGE 18 who works for his or her parents in a trade or business are NOT subject to Social Security and Medicare taxes if the trade or business is:
1-A sole proprietorship, or
2-A partnership in which each partner is a parent of the child.
Payments for the services of a child UNDER AGRE 21 who works for his or her parent in a trade or business are not subjec to Federal Unemployment Tax Act (FUTA) tax.
Payments for the services of a child are subject to income tax withholding, regardless of age.
The wages for the services of a child are subject to income tax withholding as well as Social Security, Medicare, and FUTA taxes if he or she works for:
1-A Corporation, even if it is controlled by the child's parent,
2-A Partnership, even if the child's parent is a partner, unless EACH PARTNER is a parent of the child, or
3-An Estate, even if it is the estate of a deceased parent.
CALL NOW 561-746-1926 or 561-339-8102 if you have any questions or concerns or would like to schedule a FREE, Confidential, No-Obligation Tax-Saving Consultation.