Q. Is it really legal for my child to earn income as a household employee?
Yes, it is absolutely legal when it’s done correctly and in line with IRS rules.
The IRS explicitly allows children to be employed by their parents for legitimate household work. In fact, under IRS Publication 926 (Household Employer’s Tax Guide), parents who hire their own child under age 18 for household work are exempt from paying Social Security and Medicare (FICA) taxes, and also exempt from federal unemployment (FUTA) tax if the child is under 21.
From the IRS (Publication 926):
“If you hire your child who is under age 18 to do household work, you don’t have to pay Social Security and Medicare taxes.”
“If your child is under age 21, you don’t have to pay federal unemployment (FUTA) tax.”
IRS Publication 926 (2024), page 4What qualifies as household employment?
The IRS defines household work as services done in or around your private home, including roles such as:
- Babysitter
- Yard worker
- House cleaner
- Dog walker or pet care
- Assistant for family errands or organizing
How Halfmore helps:
Halfmore ensures everything is done by the book:
- We set up a bona fide employment relationship between you and your child
- We track hours, handle payroll, and file W-2s
- We ensure compliance with IRS recordkeeping standards
- And we securely transfer the income to a custodial Roth IRA at the brokerage of your choice
Bottom line: Yes, it’s legal if you follow IRS rules.
Halfmore makes sure you do.
