Paying my kids on Square

[scottysice]

I want to pay my kids through Square so they will have a W-2 set up. However, when you pay your kids, you are not required to pay employer federal taxes like a normal employee. Does anyone know how to have my kids on the payroll but not pay the employer federal tax?

[TheRealChipA]

Hi @scottysice.  At this time, I don’t see anything in Square Payroll’s employee setup that addresses this case.  The first thing I can recommend is submitting a feature request to the Payroll Team.  They’ll review it and let you know if it is something that will eventually add to the product roadmap.

Otherwise, I highly recommend talking with a tax advisor.  They might have other ideas on how you can accomplish this.  My first thought was to pay them as a contractor, but that can get complicated quickly and it’s easy to violate the very strict rules involved.  That’s why I say talk to a tax advisor first.  

Regards,

[fikathreelakes]

I am attempting to do the same thing. @scottysice did you ever find an answer? 

[scottysice]

No. Unfortunately not.

[GingerBugs]

I have been having our kids help out at work, now that they are older our CPA said we should put them on payroll.  How can i use square payroll as they are exempt from taxes etc.  

is this possible?

[fikathreelakes]

I have the same question! @GingerBugs were you ever able to get an answer? What is your solution?

[_Violet · Accepted solution]

Hi there, @fikathreelakes - Thanks for following up on this topic.

I reached out to the Square Payroll Team and they let me know that we do not currently support paying employees who are exempt from federal Social Security and Medicare taxes.

I hope this information is helpful but please do let me know if you have any additional questions. You can also get in touch with our Payroll Team directly, here.

[dcar525]

It's very critical issue we are facing right now. If you can't exempt family employees from Social Security and Medicare - it will also impact employers because in that case we shouldn't be paying social tax as well. And because you don't have that feature available - to correct that kids will have to pay to prepare tax return to get refund which will cost them couple of hundreds, as well as our CPA will charge us additional to prepare a paperwork to get credit for social tax, medicare and unemployment.   Paying kids as independent contractors will introduce other issues with IRS, not a valid WA.

I'd consider change payroll company who has that feature supported rather then will have a headache with extra paperwork and kids to pay extra to get a refund. I checked also history and that request was initially reported back in 2017 and since then - nothing moved. If you don't have as an feature than ADP who is actually doing that payroll for you would need to have a possibility to setup that manually for selected employees. If you don't want spend time on developing the feature pls declare the process how to enable that, its one time settings for employees. 

[SalonSR]

@_Violet  @dcar525 I have the exact same issue and truly disappointing Square has ignored the issue for such a long time.