You want to hire your children for your business, but you want to follow the tax rules for hiring your kids. Good on you. Here we’ll talk about how to do that.
Children had summers off from school so they could help during summer months on the family farm. Urbanization, and mechanization of agriculture, reduced the usefulness of children working on the farm. There were also fewer farms, which were larger. Despite that, the summer months off are still the best opportunity for young people to find work. Here we’ll go over some of the rules of hiring for summer work.
Who Can Work (by Age)
Under Age 12: When it comes to farm jobs, even children under the age of 12 can work. The farm must be a small farm exempt from federal minimum wage provisions, and the child must have parental consent. Some tasks are off limits, such as operating heavy equipment, working too high up, or around dangerous animals/chemicals, etc. A child can work any non-hazardous job at any time on a family farm owned by their parents.
Children under 14 years old:
Can be hired only by a parent/sole owner (for non-agricultural jobs.)
Children under 18 years old:
May not do hazardous work.
In fact, nobody under the age of SIXTEEN can do hazardous work (if a machine or chemical can cause them damage, it’s hazardous work).
Wage Requirements: If the only employees in the business are family, the minimum wage is not a requirement. If even one worker is non-family and paid minimum wage, all employees (including family) must be paid minimum wage.
Taxes: Remember you must still obtain W-4s and withhold Federal Income Tax Withholding from all employees, including your own children if they work for you. If they are under 18, you don’t need to worry about FICA (the tax that pays into social security and Medicare.)
Fortunately, filling out W-4s are pretty easy for minors. They just need their name, address, social security number, and filing status. They aren’t filing jointly, or with dependents, and are unlikely to have non-employment income.
For the maximum daily and weekly hours acceptable by state law, see this website.
The American Institute for Public Bookkeepers was my information source for much of this post. You can visit their post here.
Your Kids Can Do Summer Jobs With You! (In Most Cases)
Hopefully this makes hiring your family in the summer much more doable, depending on your business. First-job opportunities are not dead, and your small business probably a way for your children to be a blessing and be blessed. Just be mindful not to work them overnight, or past the number of daily or weekly state mandated hours. Though honestly, nobody who loves their children should need to be forced to do the right thing. Just check the laws to make sure you’re okay, and if your kids want to work, they probably can!
What your kids probably shouldn’t be doing first is your bookkeeping. By having a good bookkeeper, you can get financial statements every month that your children can learn to read. That way they will understand the hard work you do to provide for them, and improve their financial intelligence as well. To see how I can save you 80+ hours per year and thousands of dollars, schedule a free strategy call with me.
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