BulldogTom Posted January 21, 2009 Report Share Posted January 21, 2009 If an LLC is taxed as a partnership, and a 50% owner employs his minor child in the business, does the LLC still pay employment taxes? The other partner is the minor child's grandfather. Thanks Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
PapaJoe Posted January 21, 2009 Report Share Posted January 21, 2009 From Pub 15 "Payments for the services of a child under age 18 who works for his or her parent in a trade or business are not subject to social security and medicare taxes if the trade or business is a sole proprietorship or a partnership in which EACH PARTNER is a parent of the child." If one partner is Grandpa, then the child is subject to employment taxes. Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted January 21, 2009 Author Report Share Posted January 21, 2009 I read that PapaJoe. But what is the definition of a parent? Could it be a grandparent also? I might be trying to stretch the code here, but with 529 plans falling just like every other investment, a Roth IRA invested in CD's is what the parent wants to do for the education of his child. It is a good plan, but he needs income. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted January 21, 2009 Author Report Share Posted January 21, 2009 Never mind, I found it. Reg 31.3121( b ) (3) clearly says "father or mother". No other family members count. Oh well. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
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