Does my child need to file a state tax return?
I have a child who's starting work for my family business this year (LLC). Am planning to pay her $7,000 / year for the work she'll be doing.
My understanding is that for federal returns she will only need to file tax return if her earned income for the year exceeds $12,950 and also that being employed by her parents in the family business and because she's under 18, I don't need to withhold any FUTA (federal unemployment) or FICA (social security) taxes.
I have 2 questions here:
1. Will I need to file a state tax return for her (does the state matter e.g. Georgia or North Carolina)? If not, then at what earned income wage would she need to file state taxes?
2. Do I need to withhold SUTA (state unemployment) for her wages? (I think I found the answer and posted it here below)
I'm confused about state vs federal while filing for children.
EDIT: I think I found the answer for Georgia SUTA, according this GDOL regulation:
300-2-3-.11 Family Service. Amended.
(1) General definition. Family service is exempt under the law only if a required family relationship
exists between the employee and all members of the employing unit (individual owner or partners).
Services performed in the employ of a corporation are not exempt.
(2) Family relationship requirement.
(a) One of the following relationships must exist for family service to be exempt:
1. An individual employed by his or her spouse;
2. A parent employed by his or her son or daughter; or
3. A child under the age of twenty-one (21), married or single, employed by a parent.
(b) In the parent-child employment situation, the exempt family relationship is met even if the
child is an adopted child, stepchild, or foster child; the foster child, however, must be living with
the foster parent.
It appears that children under 21 would be exempt from SUTA. Please correct me if I'm not reading this correctly here.
