Question

When an under-age 18 child by the parent's sole proprietorship or the parent's husband-wife partners

a. The child wages are exempt from federal tax

b There is no requirement to issue the child a Form W-2

c. the child's wages are exempt from Social security ,Medicare and FUTA taxes

d. The child"s compensation can be up to $25 per hour regardless of the child's age or skills

Answer 1

child under age 18 who works for his or her parent are not subject to social security and Medicare taxes if the trade or business is a sole proprietorship or a partnership in which each partner is a parent of the child.

The wages for the services of a child are subject social security, Medicare, and FUTA taxes if he or she works for CORPORATION , PARTNERSHIP UNLESS EACH PARTNER IS A PARENT OF CHILD OR ESTATE OF A DECEASED PARENT.

In the given cases

parent's sole proprietorship and parents [ husband wife] partnership child's wages are exepmt from social security , medicare and FUTA TAXES.