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URL:  https://boards.fool.com/note-that-the-work-must-be-outside-the-home-a-29982362.aspx

Subject:  Re: roth ira for your young kids/grandkids Date:  4/17/2012  1:47 PM
Author:  TMFPMarti Number:  116054 of 129005

Note that the work must be outside the home. A child babysitting their sibling or cutting their own lawn is considered doing family chores and their income as an allowance rather than earned income.

Pub 926 implies that this is wrong. It speaks specifically to the exemption from FICA/Medicare of household employee wages you pay your child under 21.

Something that hasn't been mentioned in this thread is that the employment tax exemption extends to some cases in which you hire your child to work at your business. Details are in Pub 15.

Something else that hasn't been mentioned in this thread is reasonableness. If you claim to be paying your 16 year old $100 per hour to babysit or sweep up the office, there may be some raised eyebrows in your future.

Or, as we say in Kansas, pigs get fat, hogs get slaughtered.

Phil
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