hiring your children

[nrandell]

My wife has a small internet based business, and we'd like to pay our 10 year old to do some work for the company. What are the rules and guildlines regarding taxes, etc. for this? Thanks.

[MyITGuy]

Looks like this page would help you out - Family Help (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Family-Help)

[Mr Rewire]

you cannot legaly hire your ten year old . Labor law restricis non agricultural employment to fourteen years old.

[Harold Mansfield]

Give him chores and pay him an allowance. Small business owners have been doing this for years. How many kids work in the family restaurant or store?
I don't think the Gov is going to kick your door in for having your kids help out with the family business.

But I'm pretty sure you can't make it legal and treat him like an employee.

[MyITGuy]

you cannot legaly hire your ten year old . Labor law restricis non agricultural employment to fourteen years old.

There are exceptions:

The following quote was taken from http://www.dol.gov/dol/topic/youthlabor/employmentparents.htm

The Fair Labor Standards Act's (FLSA) minimum age requirements do not apply to minors employed by their parents, or by a person acting as their guardian. An exception to this occurs in mining, manufacturing and occupations where the minimum age requirement of 18 years old applies.
State laws often follow the same pattern as the Fair Labor Standards Act with regard to minors working for their parents. Consult your state department of labor for specific guidance.

[Mr Rewire]

In our state hiring an employee means you now are required to have workmans comp insurance.

[MyITGuy]

Here in FL, workmans comp insurance isn't required until the 4th employee is hired (5th if the owner(s) exempt themselves).

But since the OP didn't post their state (and you didn't post your's) - Thats something they will have to evaluate if they don't already have it.

[Steve B]

I pay my kids all the time to work for me. There is an exceptpion when a small business owner hires their children (as pointed out by IT guy) so don't worry about that. You should only worry if your kids are getting a good experience that will value them in life.

[jamesray50]

"Payment for the services of a child are subject to income tax withholding, regardless of age."

This statement is found in the article referenced by MyItGuy. Most states follow the Federal rule. They would not be subject to SS, Medicare or Futa if the business is not a corporation or partnership.

But why complicate things? Do as Harold suggests and just pay them an allowance for helping you. When they get older, then you can add them as an employee and withhold taxes on them.

[patrickprecisione]

Yeah, you can't legally hire your kid, but you can always assign him chores and pay him for that. Just instead of mowing the lawn, it's helping out with your business. Heck, a ten year old nowadays probably knows more about the Internet than most adults do!

[Mr Rewire]

it also has to be a real job that is nessesary for your business.

[Dan Furman]

There's also some tax / IRA / savings advantages to hiring kids (I am not 100% clear on exactly what, but you should look into it.) But that's why you see so many kids in local businesses' TV commercials. They get paid/listed as an "actor", and this allows an IRA (or some type of savings plan not available until they are 18 otherwise) to be setup for them.

[johngkm]

even I think it is not legal to hire a 10 year old boy to the business. Please let him go to school.