Minors Must Pay Social Security and Medicare Taxes on Wages
Yes. If a minor earns wages from a job, they owe Social Security and Medicare taxes on that income, just as adults do. These taxes are withheld from paychecks automatically by the employer. The age of the worker does not matter — the tax obligation begins as soon as earned income arrives.
Social Security tax is 6.2 percent of wages (up to an annual earnings cap set each year). Medicare tax is 1.45 percent of all wages, with no cap. The employer also pays a matching amount. These are not optional, and they do not disappear because the worker is under 18.
The one exception is a minor working for their parents in a family business. Depending on the business structure and the state, some family employment may be exempt from these taxes. This is rare and requires specific conditions — it is not automatic.
Key Takeaways
- Minors earning wages must have Social Security and Medicare taxes withheld from their paychecks, regardless of age.
- Social Security tax is 6.2 percent of wages; Medicare tax is 1.45 percent, with no earnings limit.
- A minor working for their parents in a family business may be exempt under certain conditions, but this requires checking state law and the business structure.
- A minor can file a tax return to recover withheld taxes if their total income falls below the filing threshold for their age and filing status.
- Paying these taxes builds the minor's Social Security record and counts toward future retirement and disability benefits.
How Social Security and Medicare Taxes Work for Teen Workers
When a minor receives a paycheck, the employer deducts Social Security and Medicare taxes before the money reaches the worker's hand. The employer sends these taxes to the federal government on behalf of both the employee and the employer. This happens whether the worker is 16 or 26 — the law does not distinguish.
The minor receives a W-2 form at the end of the year showing how much was withheld. This W-2 is the official record of earnings and taxes paid. If the minor's total income is low enough, they may be able to file a tax return and recover some or all of the withheld taxes as a refund.
The Social Security taxes paid now are not lost. They count toward the minor's future Social Security record. Even a teenager working part-time is building credits that will matter later for retirement, disability, or survivor benefits.
When a Minor Can Get a Tax Refund
A minor who earned wages but had taxes withheld may owe no federal income tax at all. If their total income falls below the standard deduction for their filing status, they can file a tax return and receive a refund of the withheld taxes.
For 2024, a minor claimed as a dependent can file if they earned more than $1,300 in unearned income (like interest) or more than $14,600 in earned income (like wages). These thresholds change each year. If a minor earned $8,000 and had $500 withheld in taxes, but owes no income tax, filing a return would return that $500.
The minor files using Form 1040 or 1040-SR, along with any required schedules. Many tax software programs offer free filing for low-income filers. The IRS also maintains a list of free tax preparation sites in most communities.
Family Business Employment and Tax Exemptions
A minor working in a business owned solely by their parents may not owe Social Security and Medicare taxes on those wages, depending on the business structure and state law. This exemption applies only to sole proprietorships and partnerships where both spouses are the only partners.
If the business is a corporation (including an S-corporation or LLC taxed as a corporation), the minor owes these taxes even if the parents own the business. The exemption also does not explore if anyone other than the parents owns a stake in the business.
To claim this exemption, the employer must not withhold the taxes and must keep records showing the business structure and the family relationship. If there is any doubt, the safest approach is to withhold the taxes and consult a tax professional or the IRS directly. Incorrectly claiming the exemption can result in penalties and back taxes.
What Happens to the Social Security Record
Every dollar of Social Security tax a minor pays is credited to their Social Security account. This builds what the Social Security Administration calls a "work record." To receive Social Security retirement benefits later, a worker needs 40 credits, earned over their lifetime. A minor working part-time is already accumulating these credits.
The same taxes also cover disability and survivor benefits. If a minor becomes disabled or dies, their family may be able to receive benefits based on their work record — even if they have only worked for a few years. The taxes paid now protect against those risks.
A minor can create a my Social Security account at ssa.gov to view their earnings record and verify that wages are being reported correctly. Checking this record early can catch errors before they affect future benefits.
Common Mistakes and How to Avoid Them
One common mistake is assuming that a minor should not have taxes withheld. Some parents or teens believe that because the worker is young or earning little, they are exempt. This is not true. The withholding is required by law.
Another mistake is not filing a tax return when one is due. If a minor had taxes withheld but earned below the filing threshold, they are leaving money on the table by not filing. The refund does not arrive automatically — the minor must file to claim it.
A third mistake is not checking the W-2 for accuracy. If the employer reports the wrong amount of income or taxes withheld, the minor's tax return and Social Security record will be wrong. Comparing the W-2 to pay stubs and correcting errors early prevents problems later.
Finally, some families incorrectly claim a family business exemption when one does not explore. If the business is incorporated or has non-family owners, the exemption does not exist. Withholding the taxes is the correct action.
Where to Find Help and More Information
The IRS website (irs.gov) has a section on teen workers and tax filing. Publication 929 covers the tax situation for dependent minors. The Social Security Administration (ssa.gov) explains how work credits are earned and what they mean for future benefits.
A tax professional or CPA can answer questions about family business exemptions and whether a minor should file a return. Many communities offer free tax preparation through the IRS Volunteer Income Tax information (VITA) program, which serves low-income filers of any age.
The minor's employer should provide a W-2 by January 31 of the year following the work year. If the W-2 does not arrive or contains errors, the employer's payroll department can issue a corrected copy or explain the discrepancy.
Frequently Asked Questions
Can a minor refuse to have Social Security and Medicare taxes withheld?
No. These taxes are required by federal law and must be withheld from wages. A minor cannot opt out. The only exception is a minor working for their parents in a sole proprietorship or partnership, and even then, the exemption must meet specific conditions.
Does a minor need a Social Security number to work?
Yes. An employer must have a valid Social Security number before hiring and will use it to report wages and taxes. A minor can explore for a Social Security number at the Social Security Administration office or by mail using Form SS-5.
What if a minor's employer did not withhold Social Security and Medicare taxes?
The minor should contact the employer's payroll department and report the error. The employer is legally required to withhold these taxes. If the employer refuses or the error is not corrected, the minor or their parent can contact the IRS or the Social Security Administration to report the violation.
Can a minor claim themselves as a dependent on their tax return?
No. A minor who is claimed as a dependent by a parent must use that status on their own tax return. They cannot claim themselves. This affects the income threshold for filing and the standard deduction amount.
Do the Social Security taxes paid by a minor count toward Medicare benefits later?
Social Security taxes fund both Social Security retirement and disability benefits and Medicare. The taxes a minor pays now contribute to the Medicare trust fund, which pays for hospital insurance (Part A) when they turn 65, regardless of their work history after that point.