topic Child Employee Out of State Work in State tax filing

Child Employee Out of State Work

tjsterba198 — Sat, 08 Feb 2020 17:53:58 GMT

I've hired my two children to do cleanings of a beach rental condo that my wife and I own. They make less than $6000 per year. I understand minor children employees in family businesses are exempt from FICA, etc. The rental is in Delaware where the 'work' is done, the minor children live in Maryland. Which state, if any, do the children need to file state taxes?

Re: Child Employee Out of State Work

Hal_Al — Sat, 08 Feb 2020 19:17:03 GMT

They earned the income in DE, so it is DE source income. They have to file a DE return. There is no minimum filing requirement for non residents

https://revenuefiles.delaware.gov/2018/TY18_booklet_res.pdf

they do not need to file an MD return https://support.taxslayer.com/hc/en-us/articles/360015706552-What-are-Maryland-s-Filing-Requirements-

Minor children are only exempt from FICA, if the business issues them a W-2. You cannot pay them "under the table" or issue a 1099-Misc.

There is some question as to whether a rental qualifies as a business, for this purpose.

Re: Child Employee Out of State Work

RickG — Sat, 08 Feb 2020 19:03:23 GMT

Found something that @Carl answered back in the summer. Looks similar except for the state aspect.

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/i-own-some-rental-properties-in-my-personal-name-which-i-actively-participate-in-the-management-of/00/647065