In the US, the Internal Revenue Service (IRS) offers tax incentives for self-employed individuals who would like to hire their own children. Such initiatives aim at supporting small family businesses and assisting families in teaching children about good work ethic and value of money.The salary paid by parents to an employed child under 18 is not subject to social security and Medicare taxes. Moreover, payments to children under the age of 21 are not subject to the Federal Unemployment Tax Act tax. However, regardless of a child’s age, payments to an employed child are subject to income tax withholding.The maximum tax-free amount that can be paid to an employed child is $6.200 per year. This amount is a standard single person’s tax deduction. Any income above $6.200 received by a child is subject to regular income tax.Another IRS tax benefit for hiring children is the Child Tax Credit. This tax incentive allows parents to reduce their federal income tax by up to $1.000 for each qualifying child.In order to qualify for the Child Tax Credit, a child should meet six criteria, namely: (1) be under the age of 17; (2) be a close relative (a son, daughter, stepchild, sister, brother, etc.); (3) must not have provided more than half of their own support; (4) be dependent on claimant’s federal tax return; (5) must have US citizenship or residence; and (6) must have lived with the claimant for a certain period of time.The activities that can be performed by the hired children include, but are not limited to, cleaning offices, processing computer data, answering phone calls, making deliveries, and other secretarial and clerical work.