Hiring Your Kids Has Benefits, But There Are Limits
Hiring your kids has its benefits. For one thing, you’re putting money in your kids’ pockets that you can deduct as a business expense. (They do need to be performing actual work, though.) You can instill a sense of pride in earning, and establish a work ethic at a young age. And in Washington state, you can pay kids – if they’re under 16 – 85 percent of the minimum wage. But there are important rules and limits you need to follow as an employer.
Federal Tax Rules for Hiring Your Kids
If you’re a sole proprietor or have a partnership where both parents are partners – good news! You don’t have to pay payroll taxes on your children’s wages until they turn 18. But, if your business files taxes as an S-corporation, your kids are subject to Social Security, Medicare and other payroll taxes just like any other employee.
Washington State Rules
Employers who want to hire minors must get a Minor Work Permit endorsement on their business license. They apply with the Washington Department of Revenue, and the Department of Labor and Industries reviews the application.
For the young employee, there is a required parent/school authorization form that allows the child to work during the school year. There is a separate parents-only form that allows summer work.
Age Restrictions
In the state, kids age 16 or 17 have a broad variety of jobs available to them. But there is an extensive list of jobs considered too dangerous or inappropriate for them. For minor age 14 and 15, they too can work a wide range of jobs, but there are stricter limits on the number of hours they can work. They cannot work more than 3 hours on any school day (or 8 hours any other day). They can’t work more than six days a week, or a total of more than 16 hours in a week. The rules for summer employment are more relaxed.
There are a few jobs that kids between the ages of 7 and 13 are allowed to work. These include domestic or casual labor (e.g., babysitting, shoveling snow) as well as some kinds of agricultural work (such as berry-picking). Beyond those few exceptions, though, the state doesn’t allow these younger children to work.
Hiring Your Kids Isn’t Simple
As you can see, the rules for hiring your kids are pretty extensive. And while many folks brag of the tax benefits of employing your offspring, they, on the other hand, can be limited.
Links
Here is a link to the Washington Department of Revenue’s guide to getting a permit that allows you to employ minors.
Here’s the form parents and schools need to fill out to allow their child/student to work.
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