Hire Your Kids

The tax-free ceiling: a child with no other income can earn up to the single standard deduction — $15,750 in 2025 and $16,100 in 2026 — and owe no federal income tax. That figure is the practical per-child wage ceiling in this playbook, read from the tax-year tables.

ENTITY TABLE — read this before anything else:

Parent's sole proprietorship (incl. single-member LLC taxed as one): children UNDER 18 are exempt from FICA (Social Security + Medicare) on BOTH sides, and exempt from FUTA until 21.

Partnership where the only partners are the child's parents: same exemptions as a sole proprietorship.

Corporation — INCLUDING an S-corporation — or a partnership with any non-parent partner: NO exemption. Wages are fully subject to FICA/FUTA. The playbook branches here for a reason.

The 7-step hiring kit: (1) write a real job description; (2) complete Form W-4; (3) keep timesheets; (4) run real payroll at a reasonable rate for the work; (5) pay into the child's OWN bank account — never cash; (6) issue a W-2 at year-end; (7) check your state's child-labor rules before the first shift.

Bonus: the child can fund a Roth IRA from earned income, up to $7,000 in 2025 and $7,500 in 2026 (the lesser of earned income or the limit). Kiddie tax applies to unearned income, not wages.