Family Employees

Family members employed by a sole proprietor or a partnership may be eligible for special tax treatment.

Sole Proprietor

 

Relationship to Sole Proprietor (Owner)

Exempt From

Taxable For

Spouse of

FUTA

FICA Withholding

Child of

FICA - until age 18
FUTA - until age 21

Income Tax Withholding

Parent of

FUTA

FICA
Income Tax Withholding

Partnership

 

Relationship to Sole Proprietor (Owner)

Exempt From

Taxable For

Spouse of

N/A

Withholding FICA
FUTA

Child of both partners

FICA - until age 18
FUTA - until age 21

Income Tax Withholding

Parent of

FUTA

FICA
Income Tax Withholding

There may also be special tax treatment for household employers who employ family members. Refer to the IRS publication at the following web address for more information:

http://www.irs.gov/pub/irs-pdf/p926.pdf