child/dependent tax on earnings

[rsandy]

Client has a 20yr old daughter, in school and being claimed as a dependent. The daughter will earn about $ 3,500.00 working in the client's corporation, part time, during 2012.
I believe her earnings are subject to FICA and Medicare withholdings. Agree?

[Burke]

Absolutely.

[taxea]

Yep, so do I

[Gary2]

Client has a 20yr old daughter, in school and being claimed as a dependent. The daughter will earn about $ 3,500.00 working in the client's corporation, part time, during 2012.
I believe her earnings are subject to FICA and Medicare withholdings. Agree?

No, just FICA; the Medicare would be redundant.

[JG EA]

Pub 15 has a great chart for these type of questions. You'll notice there that a 20 year old working for his parents would not pay FUTA (and not SUTA either more than likely), a child would have to be under 18 not to pay FICA and working for his parents. In both of these instances the parents would have to be a sole-prop or the partners in a partnership.
Since a corporation is the employer in this case there are no breaks.