I have a friend who pays his minor children for work performed. A CPA recently told him that the kids would be exempt for FICA and MC withholding and employer match, as well as exempt from FUTA and California SUI(Unemployment). Can anybody confirm or deny. I can't get the SSA site to give me any help at all. Wouldn't it also make sense that they would be exempt from the California State Disability Fund, as I can't imagine, being minor family members, that they would be entitled to benefits.

Thanks in advance for any help.

Chris

<< I have a friend who pays his minor children for work performed. A CPA recently told him that the kids would be exempt for FICA and MC withholding and employer match, as well as exempt from FUTA and California SUI(Unemployment). Can anybody confirm or deny. I can't get the SSA site to give me any help at all. Wouldn't it also make sense that they would be exempt from the California State Disability Fund, as I can't imagine, being minor family members, that they would be entitled to benefits >>

Children under the age of 18 who work for their sole-proprietor parent or certain other family-controlled businesses are exempt from FICA and FUTA. You can read more about this in IRS Publication 15, a/k/a Circular E.

Sorry, but I don't know the rules for CA tax.

TMF ExRO
Phil Marti

Phil, thanks so much for the prompt response. I feel like an idiot, I was looking at the Social Security site rather than the IRS site. I found the circular immediately.

Fool on,

Chris