It depends. The store owner may want to pay her as though she is an independent contractor however, there are options for your daughter. She has the option to file this as though she was an employee and it sounds quite clear this is how she should have been treated.
It is subject to income tax and employment tax withholding, because it is compensation for work performed for an employer. There is a way to handle this in TurboTax, using either form SS-8 or a substitute W-2 form. If the wage was paid in 2024 and the employee started work in 2024 and a 1099-NEC use Form 8919 with code H. This will allow you to pay the employee share of social security and medicare tax.
Form 8919:
Complete the steps (entered below for your convenience). The IRS will go back to your employer for their share.
- Scroll to Less Common Income
- Start next to Miscellaneous Income
- Start next Other income not already reported on a form W-2 or Form 1099
- Yes to did you receive any other wages
- Continue through to Did you earn any other wages? and answer Yes
- Select Employee compensation that was not reported on a W-2
- Continue > Report your wages, employer information and select reason code H
This will report your wages and you will also see the information for the SS-8 along the way. You will pay only the employee share of social security and medicare taxes. Form 8919 will be included with your return, see the link below.
The Form SS-8 helps to differentiate between an employee and an independent contractor (self-employed).
@dmacjr15
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