A child employed by a parent is exempt from FUTA tax up to what age?

A child employed by a parent is exempt from FUTA (Federal Unemployment Tax Act) tax until they reach the age of 21. This exemption is specifically provided to encourage family businesses and to allow for the employment of younger family members without the burden of additional payroll taxes. The age limit includes the entire year in which the child turns 21, meaning if the child turns 21 any time during the calendar year, they are subject to FUTA tax for that year.

The other age options do not accurately reflect the established tax regulations regarding family employment and FUTA. Understanding these tax exemptions and requirements is crucial for proper payroll management and compliance at the federal level.