Client is 100% shareholder in S-Corp and pays 13 year old dependent to mow tha lawn where the business is located. I know a parent owned unincorporated business can employ a under 18 child and income is exempt from FICA & FUTA but can't find any info on a S-Corp. Dependent was paid $800 for the year. Can the S-Corp use the $800 as a deduction and the child not but subject to payroll taxes.
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No, the exception only applies to Schedule C businesses."The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith -
Correct
John is right, child employed by S Corp is not exempt, only exempt under Schedule C if employed by parent and under a partnership if both partners are the parents.
See Circular E, Pub 15, on page 9 and page 31 under Family Employees.
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