Yes, minors get taxed on their paychecks. Federal income tax, Social Security, and Medicare all come out of a teenager’s pay at the same rates that apply to adults, with no age-based exemption. What usually saves the money is the standard deduction: for 2026, up to $16,100 in earned income is sheltered from federal income tax for a single filer.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Most working teens earn well under that, so any federal income tax withheld through the year comes back as a refund after filing. Social Security and Medicare withholding does not come back.
What Comes Out of a Minor’s Paycheck
Two separate things get pulled from every paycheck, and they follow different rules.
The first is federal income tax. The amount withheld depends on what the minor put on their W-4 when they were hired. This is the money that can be refunded if total earnings for the year stay under the standard deduction.
The second is FICA: 6.2% for Social Security plus 1.45% for Medicare, totaling 7.65% of gross wages.2Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates On a $500 paycheck, that’s $38.25. FICA comes out regardless of how little the minor earns, and there is no filing threshold or standard deduction that shields wages from it. The employer pays a matching 7.65% on top. The contributions build the minor’s future Social Security work record.
State income tax and other local withholdings may also apply depending on where the minor works.
Why Most Teens Owe No Federal Income Tax
When a minor is claimed as a dependent by a parent, the standard deduction isn’t the full $16,100. It’s the greater of $1,350 or the minor’s earned income plus $450, capped at $16,100.3Internal Revenue Service. Rev. Proc. 2025-32
That formula is generous in practice. A minor who earns $8,000 over the summer gets an $8,450 deduction, which wipes out all taxable income. A minor earning $3,000 gets $3,450. The formula only pinches at the extremes: very low earnings hit the $1,350 floor, and earnings above $16,100 stop being sheltered. A teen earning $20,000 would have $3,900 exposed to income tax, with the first $12,400 of taxable income taxed at 10%.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
So even though income tax gets withheld from paychecks throughout the year, the actual liability at year-end is usually zero. That gap is what creates the refund.
How to Stop Unnecessary Withholding on the W-4
A minor who expects to owe no federal income tax for the year can claim exempt on the W-4, and the employer will stop withholding income tax from each paycheck. Two conditions have to be true: the minor had no federal income tax liability last year, and expects none this year.4Internal Revenue Service. Topic No. 753, Form W-4, Employees Withholding Certificate A first-time teen worker or anyone who got a full refund last year usually qualifies.
On the 2026 W-4, check the box in the “Exempt from withholding” section and complete only Steps 1(a), 1(b), and 5.5Internal Revenue Service. Form W-4, Employee’s Withholding Certificate Leave the rest blank. The exempt status lasts only for the calendar year filed, so a new W-4 has to be submitted by February 15 of the following year to keep it in place.
Claiming exempt does nothing to FICA. Social Security and Medicare still come out of every check.
When a Minor Has to File a Tax Return
A dependent minor must file a federal return for the 2026 tax year if any of these apply:6Internal Revenue Service. Check if You Need to File a Tax Return
- Earned income exceeds $16,100.
- Unearned income (interest, dividends) exceeds $1,350.
- Gross income exceeds the greater of $1,350 or earned income plus $450.
- Net self-employment income is $400 or more.
But the more common reason teens file is to get their money back. If income tax was withheld all year and total earnings came in under the standard deduction, filing Form 1040 is the only way to recover the amount shown in Box 2 of the W-2.7Internal Revenue Service. Topic No. 752, Filing Forms W-2 and W-3 Any bank interest goes on the same return.
The deadline is April 15, 2026 for the 2025 tax year.8Internal Revenue Service. When to File A minor can sign their own return; a parent or guardian may sign for a child too young to do so. There’s no penalty for a late refund-only return, but unclaimed refunds expire after three years.
Two Situations That Change the Answer
Working for a Parent’s Business
A child under 18 who works for a parent’s sole proprietorship, or for a partnership where both partners are the child’s parents, is completely exempt from Social Security and Medicare tax.9Internal Revenue Service. Tax Treatment for Family Members Working in the Family Business The rule sits in Section 3121(b)(3) of the Internal Revenue Code.10Office of the Law Revision Counsel. 26 USC 3121 – Definitions On $10,000 of wages, that’s $765 of FICA the child doesn’t pay, plus another $765 the parent-employer avoids.
The exemption disappears if the business is incorporated (including an S-corp), if the child turns 18, or if the partnership has any non-parent partner. Household work paid by a parent to a child in their own home is exempt from FICA until the child turns 21, and wages paid by a parent to a child under 21 are also exempt from federal unemployment tax.11Internal Revenue Service. Family Employees12Internal Revenue Service. Topic No. 756, Employment Taxes for Household Employees Income tax rules aren’t affected by any of this.
Student Jobs at the School They Attend
A minor working for the school, college, or university where they’re enrolled at least half-time may qualify for the student FICA exception under Section 3121(b)(10).13Internal Revenue Service. Student FICA Exception The work has to be part of the educational experience, not a career position. The exception is lost if the student qualifies as a “professional employee,” a category the IRS reads to include anyone eligible for retirement plan contributions, paid vacation, sick leave, or similar benefits. A few hours a week at the campus bookstore usually qualifies; full-time staff who happen to take a class do not.
Gig Work and Self-Employment Are Different
Money earned mowing lawns, tutoring, freelancing, selling online, or working through gig apps doesn’t come with a W-2 or employer withholding, but it’s still taxable. And it carries an extra cost the paycheck version doesn’t.
A minor with $400 or more in net self-employment earnings owes self-employment tax at 15.3%, which is both halves of FICA combined. There’s no employer to absorb the employer half. On $2,000 of net earnings, that’s roughly $283 in self-employment tax before any income tax question arises. Self-employment income does count as earned income for the standard deduction, so it can still be sheltered from income tax, but the self-employment tax applies from the first dollar once the $400 threshold is met. The minor files Schedule C and Schedule SE with Form 1040.
Third-party payment platforms (Venmo, PayPal, Cash App) issue Form 1099-K when gross payments exceed $20,000 and transactions exceed 200.14Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill Not receiving a 1099-K doesn’t make the income untaxable; it just means no matching form goes to the IRS.