How can I claim my child as an employee?

[Bsch4477]

You don’t claim your child as an employee. You give the child a W-2 and the child reports the income on their own return if they make enough to have a filing requirement. 

[KrisD15]

If you employed your child, you would have issued to them a W-2. 

Then, you would claim the wages and taxes paid as a business expenses. 

[bradsims-gmail-c]

My child was under 18 years old in 2022. I was told that I could claim up to $12,000 for him as an employee in my sole-proprietorship and that I wouldn't need a W-2 because he was under 18. I was also told that the deduction could be in the form of goods and services. 

From the IRS website: "Payments for the services of a child under age 18 are not subject to social security and Medicare taxes. If the child is 18 years or older, then payments for the services of a child are subject to social security and Medicare taxes." (https://www.irs.gov/businesses/small-businesses-self-employed/family-help). 

What I'm trying to find out is where do I enter that into my filing in TurboTax? 

[AliciaP1]

Your child was subject to income tax withholding as an employee, if you are a sole-proprietorship or both-parent partnership, regardless of age.  There is no up to $12,000 deduction allowance.  Therefore, you had to issue a W2 to your child and the amount in box 1 of the W2 is deductible as Wages.

Per the IRS:

Child employed by parents.

Payments for the services of a child under age 18 who works for their parent in a trade or business aren't subject to social security and Medicare taxes if the trade or business is a sole proprietorship or a partnership in which each partner is a parent of the child. If these payments are for work other than in a trade or business, such as domestic work in the parent's private home, they’re not subject to social security and Medicare taxes until the child reaches age 21. However, see Covered services of a child or spouse, later. Payments for the services of a child under age 21 who works for their parent, whether or not in a trade or business, aren't subject to FUTA tax. Payments for the services of a child of any age who works for their parent are generally subject to income tax withholding unless the payments are for domestic work in the parent's home, or unless the payments are for work other than in a trade or business and are less than $50 in the quarter or the child isn't regularly employed to do such work.

Covered services of a child or spouse.

The wages for the services of a child or spouse are subject to income tax withholding as well as social security, Medicare, and FUTA taxes if they work for:

A corporation, even if it is controlled by the child's parent or the individual's spouse;

A partnership, even if the child's parent is a partner, unless each partner is a parent of the child;

A partnership, even if the individual's spouse is a partner; or

An estate, even if it is the estate of a deceased parent.

In these situations, the child or spouse is considered to work for the corporation, partnership, or estate, not you.

@bradsims-gmail-c 

[ksteen]

Hi all.  

My wife and I own an ice cream shop,  and our 2 favorite employees are 2 of our daughters.  One turned 18 in 2023, the other 16.  

I set them up on our payroll system as regular employees so they get SS tax withheld.

After reading this question, is it possible for me to claim to get the SS taxes withheld back?  

How would I do that with Turbo Tax?

I'm not asking about federal income tax - they'll get all that back regardless as they didn't make enough.

Thanks

[Bsch4477]

That’s not a TurboTax issue. See here. 

https://www.irs.gov/businesses/small-businesses-self-employed/correcting-employment-taxes#:~:text=Fo....