When your child begins their summer job and will be paid as a W-2 employee, their new employer will require them to complete a Form W-4, Employee’s Withholding Certificate. The purpose of the form is to instruct the employer how to withhold income taxes from your child’s weekly paycheck. However, if your child’s expected wages will be small (less than $14,600 in 2024), then he or she will be allowed to claim an exemption from federal tax withholdings from their wages. To claim this exemption, they must meet the following qualifications:

1. Last year your child had no federal income tax liability, and
2. This year your child expects to have no federal tax liability again.

To claim this special exemption on the Form W-4:

1. Complete Step 1 (name and address).
2. Leave blank Steps 2, 3 and 4.
3. In the space below Step 4(c), your child will write “Exempt”. By claiming “Exempt” no federal income taxes will be withheld from your child’s pay.

Assuming your child has no significant investment income and their wages earned will be less than $14,600 (the standard deduction for 2024), then there will be no federal tax liability for your child for 2024. Additionally, if no federal income taxes are withheld, your child’s wages are below $14,600 for 2024, and there is no other income received by your child; then no federal tax return will be required to be filed by your child. One final note – Although there will be no federal income taxes withheld from the paycheck when claiming “Exempt” status, your child will still be subject to social security and Medicare taxes being withheld from his or her paycheck.