Under 21 in parents llc

[Super Mom]

I have an LLC, excluded for tax purposes and files a C. She will hire her 18 year old son. I know corporations don't get the exemption from FUTA for kids under 21---is an LLC considered a corp? and does it matter that she is excluded for tax purposes?

[Gretel]

I have an LLC, excluded for tax purposes and files a C. She will hire her 18 year old son. I know corporations don't get the exemption from FUTA for kids under 21---is an LLC considered a corp? and does it matter that she is excluded for tax purposes?

No, an LLC is a Limited Liability Company and can elect to be taxed as a corporation. "She" is not excluded for tax purposes, the LLC is disregarded for tax purposes. LLC is a legal entity on the State level. All you have is a Schedule C with all benefits and downfalls a Schedule C has, other than that there is limited liability.

[Snaggletooth]

Age is not so much the problem

Age is not so much the problem as the kinship. Children working for their parents at ANY age are exempt if the employer is a proprietorship, and most states follow suit with SUTA.

It's not that the states want to give up the money. The problem is that they don't want these children laid off from work and drawing unemployment. Much more so than with other employees.

[Super Mom]

No, an LLC is a Limited Liability Company and can elect to be taxed as a corporation. "She" is not excluded for tax purposes, the LLC is disregarded for tax purposes. LLC is a legal entity on the State level. All you have is a Schedule C with all benefits and downfalls a Schedule C has, other than that there is limited liability.

Yep, I meant to say she was disregarded not excluded, sorry!