Student Minimum Wage for Family Daycare?

[marniewon]

Do any of you pay your teens to help in your daycare? I've been looking all over the internet for a student minimum wage, but all I can find is the one that says you can pay a youth employee under 20 years old $4.25/hour for 90 days, then it has to go up to the regular minimum wage. There are days that I don't even make minimum wage!! I can't afford to pay my kids that. I want to be able to claim those employee wages so it doesn't look like I'm making more than I am (and have higher taxes) but I would have to take taxes out of their pay also, and not sure if the IRS/DOL would do anything if I'm paying them less than min. wage. BTW, they are almost 16 and almost 14.

[MarinaVanessa]

So these are your kids right? My tax guy (which I met through a taxes for daycare workshop through my local Child Development Resources) told me that if I "paid" my kid to help out for daycare that I could claim it as emloyee pay and it's tax free as long as you stay under a certain amount a year total for all of your kids. You may want to look into that.

Also you don't have to pay your kids period to work for you because they are your kids as long as it doesn't interfere with their health, safety or education. If you choose to pay them anyway you can pay them whatever you want because minimum wage doesn't apply to your own kids, it's more like an allowance. Apparently child slave labor laws don't count if you give birth to the kids that you are employing lol. I know this part is true because I worked for my parent's petstore business since I was 16 until I was 21 without technically getting paid (I paid no rent, food, for college etc.) and my sister hung out at the business since she was 6 and ran the register from age 8 until my parent's closed it down last year at age 18. Neither one of us ever got "paid" for it and as a rebelious teenager I asked about it by calling Labor Law and asking them lol.

[marniewon]

Thank you so much! Now that you said that, I remember something about paying your kids up to so much per year. Now I just have to remember where I saw that!! LOL

[Crystal]

I pay my daughter $10 an hour to work with/for me. She's 17. I pay her what she earns and make it worth her while....she does the same work I do when she works with/for me.

[TomCopeland]

Family child care providers can hire their own children to do work for their business. The child must do work directly related to your business, not household chores. In other words, paying your child to mow the lawn or take out the garbage will not be allowed. The work must be something that wouldn't be done if you weren't in business. You need to keep good records showing when your child did the work, what the work was, and when you paid them. You want to avoid the IRS asserting that what you paid your children was an allowance instead of a business expense.

If your child is under age 18 you do not have to pay social security taxes on these wages. If your child earns less than $5,700 in a year from all sources (2009 limit) then he or she doesn't have to pay any income taxes on these earnings.

Federal minimum wage is $7.25 an hour. However, if you hire just one employee (not a family member) you don't have to pay this. If you hire your own children you are not required to pay the federal minimum wage. But watch out - you may have to pay your state minimum wage, even to your own young children. Check with your state department of labor to find out your state's rules.

Tom Copeland