child as employee

[gman]

When sole-proprietors pay their children under the age of 18, they are not required to deduct for social security/medicare, but what forms are required to be filed. Children are their only employees.
form 941 or 944, w-2, 940??? Is there anywhere on these forms to identify it as family labor not subject to tax??

[ATSMAN]

W2, 941

My son used to help me during the tax season he was in high school. You still need to withold state and federal taxes. No FICA or FUTA.

So you will still need to file a W2, 941 and state forms.

[RitaB]

Hey, I know one

Is there anywhere on these forms to identify it as family labor not subject to tax??

On the 941, check box 4.

On the 940, minor child wages go in box 4, and check box 4e.

And, I believe the default is to use Form 941 until they notify you to use Form 944. Either way, they yell at you, so don't worry about it.

[Nashville]

Form 941

When sole-proprietors pay their children under the age of 18, they are not required to deduct for social security/medicare, but what forms are required to be filed. Children are their only employees.
form 941 or 944, w-2, 940??? Is there anywhere on these forms to identify it as family labor not subject to tax??

No provision on the 941 to call it "family labor" and probably a mistake to give them this much information anyway.

There is, however, a provision to calculate the tax liability under such circumstances. On the Form 941, there are two separate lines to enter amounts as FICA wages and Medicare wages. The child labor would be reported under "Total" wages, but not under these two aforementioned lines.

It is quite possible (and common, actually) for FICA wages to be MORE than Total wages, and in some cases LESS than Total Wages. See Pub 15.