Yes, you are correct. The IRS will go back to the store owner and they will have a penalty for late payment. It's not confusing as far as what the store owner is required to do.
You can file the 1099-NEC as though your daughter is self employed which will let them off the hook. If they tell her when to be there, what to do, when to leave, how to perform her duties, etc, they are an employer.
Many taxpayers do choose to follow the self employment route in this situation. She will have to pay self employment tax on the net amount of the income. If she does happen to have any expenses, she would be allowed to use them.
Example of the SE Tax: The self employment net profit is first allowed to be reduced for 7.65% (1.0 - .0765 = .9235), this is then multiplied by the net profit to arrive at the amount subject to self employment tax ($500 x .9235= $462). The balance is taxed as follows:
- $462 x 12.4% for social security tax = $57.28
- $462 x 2.9% for medicare tax = $13.40
@dmacjr15
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