Minor Child Payroll - Sch C

Schedule C client has no other employees on payroll. He travels the country, his minor child comes with him. The child helps him clean up construction sites about 10 to 20 hours a week. My understanding is no payroll withholding/FICA are due based on the age of the child and Sch C status.

I assume he would W-2 his son at year end for any amount paid. Are there any quarterly 941 or annual 944 filing requirements if this is his only employee?

We don't file a Form 941 or 944 if there are no taxes withheld, including both child situations like this, and churches. We haven't ever had any problems with that. In fact, in situations where we did file a Form 941 (because they withheld federal income tax), we've had problems quite often because the IRS ignored the checkbox on line 4 indicating that the wages weren't subject to FICA tax.

When we file W-2 at year-end, we put a "family employee" notation in box 14.

I don't file 944 or 941 in this situation.

Just file the W-2 in January to establish that these were deductible wages (and not allowance).

Tell the kid to stuff a Roth IRA too. 50 years of compounding, tax free, in low cost index funds will be very powerful, assuming the kid has the self-control to not tap the account during his "dumb years".

p.s. Examine SUTA. There may not be a dependent child exemption for that depending on the state.

If the child is working in other states, he may have a filing requirement for that State.