The partnership has to function like a business and has to agree on what work is required and the cost to the partnership. The fact that some partner’s’ kids are earning money and others are not should not be an issue if there’s agreement on those issues. I assume that you each get a K-1 to report income and expenses for the partnership so the cost of the employees would be reflected there. The children would get a W-2 like any other employee and report that income on their own returns making sure that on their returns they check the box saying that someone else can claim them. As an aside, the child can start a Roth IRA to the extent of their income.
