What Makes a Child's Job "Legitimate" Under the IRS

The IRS does not care whether an employee is a family member — it cares whether the work was actually performed and whether the compensation is ordinary and necessary for the business. Under IRC §162(a), wages are deductible as a business expense when: (1) the work is real, (2) the pay is reasonable for the services rendered, and (3) you keep records that prove both.

Laundry passes every part of this test. Turnover cleaning companies typically charge $15–$25 per set of sheets and towels laundered. That is market-rate evidence you can point to when setting your child's wage. The task is tangible, completable, and directly tied to your rental income.

The IRS has disallowed child-employee wages in cases where: the child was too young to understand or complete the task, the wage was wildly above market (paying a 9-year-old $40/hour), there were no records whatsoever, or the payments were inconsistent with what you would pay an unrelated worker for the same job.

Key Rule

Ask yourself: "Would I pay an unrelated teenager the same amount per hour to do the same task?" If yes, and you can document the work, the deduction holds up.

Legitimate Tasks for Minor Children in an STR Business

The range of genuine STR jobs a child can perform is wider than most hosts realize. The following tasks are all routinely outsourced to third parties — which makes them clearly deductible when performed by an employee at market rates.

Laundry & Linen Service

Schedule C Line 26

Washing, drying, folding, and organizing sheets, pillowcases, towels, and bath mats between guest stays. Checking for stains and flagging damaged linens.

Market rate: $12–$18/hour or $3–$6 per linen set. Example: child washes 4 loads per turnover × 6 turnovers/month × $15/hour = deductible wages and FICA-exempt if you are a sole proprietor or SMLLC.

Supply Restocking

Schedule C Line 26

Checking inventory of toiletries, coffee pods, paper goods, and kitchen supplies. Preparing and delivering restocking kits to the property between guests.

Market rate: $12–$15/hour. Restocking a standard STR takes 20–40 minutes per turnover, which is a reasonable and documentable block of time.

Light Cleaning & Property Inspection

Schedule C Line 26

Pre-arrival walkthrough to check cleanliness, identify missing or damaged items, reset decorative elements, and confirm the property is guest-ready. This supplements — rather than replaces — professional cleaning for older, capable children.

Market rate: $13–$16/hour. Property management companies charge for exactly this inspection service.
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Age-Appropriate Thresholds

There is no IRS minimum age for employment. The practical test is capability: can the child actually perform the work to a standard you would accept from any worker? A 10-year-old folding laundry is entirely credible. A 6-year-old "managing social media" at $30/hour is not.

Age Range Appropriate Tasks Example Pay Range
8–10 years Laundry folding, supply counting, light restocking $10–$12/hour
11–13 years Laundry full cycle, restocking, property photos, basic guest messaging $12–$15/hour
14–17 years All above + social media management, listing photos, property inspections, admin work $14–$20/hour

Federal child labor law (Fair Labor Standards Act) does not restrict family-owned businesses in the same way it restricts non-family employers. Children working for a parent's business are generally exempt from FLSA minimum age requirements, though state laws vary. The IRS does not reference FLSA compliance as a condition of the wage deduction — it focuses solely on whether the work was real and the pay was reasonable.

Caution

Paying a younger child an adult-level hourly rate for simple tasks invites scrutiny. A 9-year-old folding towels at $40/hour would not pass the "arm's-length" test — no unrelated employer would pay that rate for that task at that age.

Documentation Requirements

Documentation is what separates a legitimate child-employee arrangement from a disguised allowance. The IRS looks for contemporaneous records — notes made at or near the time of work, not reconstructed months later.

Minimum Documentation Set

Tax Savings Illustration

Sole proprietor in the 32% bracket paying their 13-year-old $8,400/year for laundry and restocking: deduction saves ~$2,688 in federal income tax plus 15.3% SE tax savings (~$1,285). Total annual savings: ~$3,973. Child owes zero federal income tax (under the $14,600 standard deduction). Child can contribute up to $7,000 to a Roth IRA.

How to Set Up the Arrangement Properly

Setting up a proper child-employment arrangement takes less than an hour of paperwork. Once established, the documentation routine is a few minutes per pay period.

Step 1 — Write a Job Description

One to two pages covering: job title, start date, hourly rate, specific duties, hours per week or per turnover, and supervisor (you). Keep this on file. It does not need to be formal — a typed document will do.

Step 2 — Obtain an EIN (if you don't have one)

You need an Employer Identification Number to issue W-2s. Apply free at irs.gov using Form SS-4. As a sole proprietor or single-member LLC, this EIN is separate from your SSN and used only for payroll purposes.

Step 3 — Set Up Payroll

Even simple payroll software handles the W-2 and records. Alternatively, pay manually by check every two weeks, keep a wage ledger, and issue the W-2 manually at year-end. The FICA exemption (IRC §3121(b)(3)(A)) means no withholding for Social Security or Medicare for children under 18 working for a parent's sole proprietorship or SMLLC.

Step 4 — Maintain Ongoing Records

A shared notes app, spreadsheet, or paper logbook works. The key is consistency — every work session logged, every payment recorded. Photos take 10 seconds and provide strong corroborating evidence.

Pro Tip

Use a texting thread to assign tasks ("Please wash the linens from Property A today") and have your child confirm completion ("Done — 2 loads folded, put in supply bin"). Screenshots of these exchanges are excellent supporting documentation.

Social Media, Photography, and Administrative Tasks

Older teenagers often perform higher-value tasks that are also fully deductible. Listing photography is a common STR expense — professional photographers charge $200–$400 per session. A 16-year-old with a smartphone who produces usable listing images is providing a genuine service worth a meaningful hourly rate.

Social media management — posting guest reviews responses, maintaining an Instagram or TikTok presence for the property, or managing a direct-booking website — is another legitimately deductible task. Document output: how many posts were published, what platforms, what tasks were completed.

Administrative work such as guest message templates, calendar management, and supply inventory tracking is appropriate for teenagers who can demonstrate actual output. Pay the prevailing rate for virtual assistant or administrative work ($14–$20/hour) and document what was produced.

Track Every Family Employee Expense

DeductFlow auto-categorizes payroll, supplies, and turnover expenses — so your child-employment deductions are organized and audit-ready year-round.

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