Tax Tips for Children or Grandchildren with Part-Time Job

Many of us have kids or grandkids who work part-time. Whether they’re bussing tables, working in a shop, or other jobs, these tips may help them (and you) understand the tax implications of part-time jobs:

  • Withholding: If your child is working for an employer, they will generally withhold taxes from their paycheck. If they are self-employed, however, they may be responsible for paying these taxes directly to the IRS.
  • Self-Employment: It’s a good idea to keep records of income and expenses related to self-employed work. Expenses associated with self-employment may be deductible.
  • New Employee Paperwork: Talk to your child or grandchild about the paperwork they may need to fill out when starting a new job. This will likely include a W-4 form, which is a form that businesses use to calculate how much federal income should be withheld from their paycheck.
  • Tip Income: All tip income is taxable, and if they make more than $20 in cash tips a month, they must report it to their employer. In addition, they must report all yearly tips on their tax returns.
  • Payroll Taxes: Even if your kids or grandkids earn too little to owe income tax, they may still have to either pay Social Security and Medicare taxes themselves or have them withheld from their paycheck.

*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov6

Footnotes and Sources

  1., May 1, 2023