Report FUTA for Father of Sole Proprietor or Not?

When you are SURE seek some face to face professional assistance with the Pub 15 in your hand tp make sure that you do get this done CORRECTLY the first time in order to keep from having some bigger problems with this matter at some future time in your life for this purpose.

State and Federal are usually the same but make sure that you do get it done correctly.

Hope that you find the above enclosed information useful. 08/02/2012

as stated the FUTA is for spouse and children, not other family members

Gee, your copy of circular E doesn't match mine. Page 30 of pub 15/circular E CLEARLY shows exempt next to "parent."

From IRS website:

Parent employed by child

The wages for the services of a parent employed by his or her child in a trade or business are subject to income tax withholding and social security and Medicare taxes. Wages paid to a parent employed by his or her child are not subject to FUTA tax, regardless of the type of services provided. For additional employment tax information, refer to Publication 15, Circular E, Employer's Tax Guide, and Publication 51, Circular A, Agricultural Employer's Tax Guide.

If your parent works for you in your business, the wages you pay to him or her are subject to income tax withholding and social security and Medicare taxes. Social security and Medicare taxes do not apply to wages paid to your parent for services not performed in your business, but they do apply to domestic services if both the following conditions are met.

Your parent cares for your child who lives with you and is under 18 or requires adult supervision for at least 4 continuous weeks in a calendar quarter due to a mental or physical condition.

You are a widowed, divorced, or married to a person who, because of a physical or mental condition, cannot care for your child during that period.