Child Employment and S Corp

[Super Mom]

I have a potential new client who thinks she is benefiting by employing a child. I'm under the impression that all payroll taxes must be paid for a child by an S Corp or C Corp, obviously the benefit would be income shifting, but no help with payroll, right?

[ChEAr$]

I have a potential new client who thinks she is benefiting by employing a child. I'm under the impression that all payroll taxes must be paid for a child by an S Corp or C Corp, obviously the benefit would be income shifting, but no help with payroll, right?

Absolutely correct. FICA, SUTA and FUTA can add up to another 11plus %. And another 5.65% FICA taken out of child's pay.

Now this would not be the cse if she herself were employing the child in a proprietorship.
But here, explain to her, the child is not working for her, but for a separate entity.

[Super Mom]

Thanks, just like to double check!!

[Lion]

Work Permit

And remind her to have the child get a work permit for the appropriate type of work. (Around here, that comes from a HS guidance office.)

[Burke]

Absolutely check local laws for the type of work a child can perform. Also, Child labor requirements under US DOL mandate that employees under 18 cannot do work that involves driving a vehicle, for instance running errands, or delivering materials, buying supplies, etc. for the owner/proprietor/employer. State laws may be stricter and they overrule federal if they are.