Not Having To Pay Fed Unemployment Taxes For Relatives

[SSWonders]

I've been reading your articles about hiring relatives. I am contemplating hiring my 24 yr old daughter as a full time employee. The article of yours I was reading states that the employer won't owe federal unemployment taxes for a relative. I'm wondering why that is and would she still be able to claim unemployment benefits if I had to lay her off.

[TomCopeland]

I've been reading your articles about hiring relatives. I am contemplating hiring my 24 yr old daughter as a full time employee. The article of yours I was reading states that the employer won't owe federal unemployment taxes for a relative. I'm wondering why that is and would she still be able to claim unemployment benefits if I had to lay her off.

You don't owe federal unemployment taxes for relatives because it would be too easy to then fire your daughter and have her get unemployment benefits. She is therefore not entitled to claim unemployment benefits.

[SSWonders]

That seems really unfair. That can be said about any employee. The fluctuation of daycare enrollments make lay off a potential situation for any employee.

Thanks for clarifying.