How much can I pay my child tax-free in 2026?
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
Learn more: How to Hire Your Kids: The Complete Guide
Sources
- IRS Publication 929: Tax Rules for Children and Dependents
- IRC §3121(b)(3)(A): FICA Exemption
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