Yes, I can see why the State of Washington had you set this up as a separate business. This was done solely to obtain a UBI number that is only unique to the State of Washington.
Since you are paying from a trust rather than your own personal account, you would need to include a Schedule H from your trust account. Turbo Tax Business for a 1041Trust Account has the ability to generate a W2 from the program to issue to your household employee. The bad news is that Schedule H is not supported in Turbo Tax Business, even though it is permitted to by the IRS, thus the form would need to be filled out, printed, and mailed to the IRS along with the 1041 return. It can not be filed electronically. Mailing instructions are provided with your 1041 return once prepared.
Here is a pdf copy of this form and the instructions stating it can be attached to Form 1040, 1040-SR, 1040-NR, 1040-SS, or 1041.
If you submit payroll taxes to the State of Washington in your own name with the Trust EIN, this shouldn't be an issue but I would submit a name change changing it to the Trust name to avoid any future confusion.
Your son will not report a Schedule H in his own personal tax return. This will be filed strictly within the trust 1041 return. Also, you won't need to file a separate 1040 business return since you only established it to satisfy a State of Washington requirement.
I would submit a name change to the State of Washington to change the name of the sole proprietorship to the trust name rather than your own personal name to avoid any confusion. Additionally, you may wish to submit a name change to the IRS in accordance with these instructions.
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