## Quick Answer

In 2026, you can pay your child up to **$16,100 completely tax-free**. This is the standard deduction amount for single filers. Your child owes $0 federal income tax on wages up to this threshold. If you're a sole proprietor or single-member LLC, wages paid to children under 18 are also exempt from FICA taxes (Social Security and Medicare), saving an additional **15.3%**. The key requirements are real work, reasonable pay, and proper documentation.

## The Details

Here's how the tax-free threshold works:

### Federal Income Tax: $16,100 Tax-Free

The standard deduction for 2026 is $16,100 for single filers. Since your child is likely filing as a single dependent, they can earn up to this amount with **zero federal income tax**.

Even if they earn more than $16,100, they only pay tax on the excess—and at the lowest bracket (10%), that's still minimal.

### FICA Taxes: Additional 15.3% Savings

If you're a **sole proprietor or spousal partnership**, wages paid to your child under 18 are exempt from Social Security and Medicare taxes (FICA). That's 15.3% you don't pay—on top of any income tax savings.

| Business Type              | FICA Exempt? |
|---------------------------|---------------|
| Sole Proprietorship       | Yes           |
| Single-Member LLC        | Yes           |
| Partnership (both parents)| Yes           |
| S-Corporation            | No            |
| C-Corporation            | No            |
| Household (non-business) | N/A           |

### State Taxes May Apply

Most states follow federal rules, but some have their own standards. Check your state's requirements for dependent income taxes.

## What This Means for You

If you pay your child $16,100 in 2026 for legitimate work:

- **Your child pays:** $0 federal income tax
- **You (sole prop) save:** Up to $2,463 in FICA taxes
- **Plus:** The wages are deductible as a business expense
- **Plus:** Your child can contribute up to $7,500 to a Roth IRA

The key is **proper documentation**. The work must be real, the pay must be reasonable, and you need contemporaneous records.

See how much your child could accumulate in a Roth IRA: [Roth IRA Calculator](/content/resources/roth-ira-calculator/index.html)

Learn more: [How to Hire Your Kids: The Complete Guide](/content/guides/hire-your-kids/index.html)

## Sources

- [IRS Publication 929](https://www.irs.gov/publications/p929): Tax Rules for Children and Dependents
- [IRC §3121(b)(3)(A)](https://www.law.cornell.edu/uscode/text/26/3121): FICA Exemption