Hello,
For putting my children on payroll in my rental business, I am in the process of preparing W-2s for them for 2011. I realize that I do not have Federal or State (California) Employment Identification Number (EIN). Would that be a problem? Can I just use my social security number instead for both Federal and State Identification Number? Please help. Thanks in advance for your help.
You need an Employer Identification Number (EIN) if you have employees, even if the employees are your children.
If you have employees, even if they are your children, you should have been withholding and remitting federal and state income taxes from their pay and filing quarterly payroll tax returns. If your rental business is a separate legal entity (that is, if you are not reporting your rental activities on Schedule E), then you should also have been withholding, matching and remitting Social Security and Medicare taxes from their pay.
You just file a Schedule E, right? No corporate returns?
For them to be employees, you will need toget an EIN (I can't speak for the state, but in Ohio you'd have to get a state number.)
Their salary would have to be in line with the work they actually perform.
And it's easy to get one online:
Just wanted to clarify that I had asked the payroll tax filing question in a post here a few months ago and since my kids are 18 years and under, I am not required to file or pay employment taxes, such as FICA, FUTA, ETT, etc in an unincorporated business. Also, if the wages are up to standard deduction amount, income taxes are not paid either. But thanks for your response.
Have something to add? Share your thoughts — no account required.
Ask the community — no account required