Is there a maximum age?
There is no maximum age for employment and the only requirement continues to be a 'reasonable' standard for the services provided. Keep in mind the concept that makes this such a tremendous benefit is that taxable income is being moved from YOUR tax return onto the CHILD's tax return. If the marginal tax bracket of a 40 year old child is substantially less than your marginal tax bracket AND you are giving the child money anyway, then creating a job is a tremendous idea and will save you literally thousands in taxes.
If the child is at least 18 years old, however, the wages are subject to FICA and Medicare taxes. You would therefore, withhold 7.65% of gross wages, match that total with an employer portion of FICA and Medicare equaling 7.65%, for a total payroll tax amount of 15.3%. You will still save the federal income taxes based on your marginal tax bracket which could be as much as 39.6%, but somewhat less of a home-run than if the child were under age 18.
The bottom line is that there is no maximum age limit, but the tax savings can be less, even though still substantial, if the child is 18 years of age or older.
If the child is at least 18 years old, however, the wages are subject to FICA and Medicare taxes. You would therefore, withhold 7.65% of gross wages, match that total with an employer portion of FICA and Medicare equaling 7.65%, for a total payroll tax amount of 15.3%. You will still save the federal income taxes based on your marginal tax bracket which could be as much as 39.6%, but somewhat less of a home-run than if the child were under age 18.
The bottom line is that there is no maximum age limit, but the tax savings can be less, even though still substantial, if the child is 18 years of age or older.