Most minors see about 7.65% of each paycheck disappear to federal payroll taxes, and that piece is essentially permanent. There is no age-based exemption from withholding, so how much minors get taxed on their paycheck comes down to two separate deductions: FICA, which almost always applies, and federal income tax, which a low-earning minor can often switch off entirely by filling out the W-4 correctly.
The 7.65% FICA Deduction
The biggest unavoidable paycheck deduction for most minors is the Federal Insurance Contributions Act tax, which funds Social Security and Medicare. The employee’s share is 7.65% of gross wages: 6.2% for Social Security and 1.45% for Medicare.1Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates The employer pays a matching 7.65% that the employee never sees on the pay stub.
There is no low-income break on FICA. A teenager earning $3,000 over the summer pays the same 7.65% rate as someone earning $80,000. The Social Security portion stops once total annual wages exceed $184,500, but that cap is irrelevant for virtually any minor.2Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet The Medicare portion has no cap at all.
One detail catches people off guard: FICA withheld from a standard paycheck cannot be recovered by filing a tax return. Unlike federal income tax, where you file a 1040 and get over-withheld amounts refunded, Social Security and Medicare deductions are final. That’s why the income tax side of the W-4 matters so much; it’s the one piece most minors can actually control.
The One FICA Exception: Working for a Parent
Wages paid to a child under 18 by a parent’s sole proprietorship, or by a partnership in which both partners are the child’s parents, are completely exempt from Social Security and Medicare taxes. A separate rule exempts children under 21 from FICA when performing domestic work in a parent’s private home.3Internal Revenue Service. Family Employees
The exemption disappears the moment the business structure changes. If the parent’s business is a corporation, an estate, or a partnership that includes anyone other than the child’s parents, the child owes FICA on every dollar regardless of age.3Internal Revenue Service. Family Employees Parent-owned LLCs taxed as sole proprietorships typically qualify; parent-owned S-corps do not. The entity type on paper controls, not who actually runs the business.
Federal Income Tax Is Often Avoidable
Federal income tax withholding is an estimate of what the employee will owe at year’s end, calculated from the information on Form W-4.4Internal Revenue Service. Form W-4 (2026) Employee’s Withholding Certificate For 2026, the standard deduction for a single filer is $16,100.5Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill Any earned income below that figure is shielded from federal income tax entirely.
Most minors working part-time or seasonal jobs earn well under $16,100 in a year. Their actual federal income tax liability is zero, which means every dollar withheld for income tax is money they’ll wait months to get back as a refund. Preventing the withholding in the first place is the smarter move.
How to Claim Exempt on the W-4
A minor who expects to owe no federal income tax can claim exempt status on Form W-4, which tells the employer to skip income tax withholding altogether. The 2026 W-4 requires the employee to check the exemption box and certify two things: they had no federal income tax liability in 2025, and they expect to have none in 2026.4Internal Revenue Service. Form W-4 (2026) Employee’s Withholding Certificate For a teenager starting a first job whose income will stay below $16,100, both conditions are almost always satisfied.
To claim exempt on the 2026 form, complete Steps 1(a), 1(b), and 5, check the exemption box, and leave the other steps blank.4Internal Revenue Service. Form W-4 (2026) Employee’s Withholding Certificate Claiming exempt only stops federal income tax withholding. FICA deductions continue as normal.
Here’s the part most people miss. Exempt status expires every year on February 15. If the minor doesn’t submit a new W-4 claiming exempt by that date, the employer is required to start withholding income tax as though the employee is a single filer with no adjustments.6Internal Revenue Service. Topic No. 753, Form W-4, Employees Withholding Certificate A minor who claimed exempt in January 2026 needs to turn in a fresh W-4 by February 15, 2027, or withholding starts up again. A calendar reminder is worth the 30 seconds.
If a minor’s income later grows past the $16,100 standard deduction, say from extra shifts or a second job, they should file a new W-4 and remove the exempt claim. Staying exempt when you actually owe tax can result in an unexpected bill at filing time and a possible underpayment penalty.
State and Local Withholding
State income tax withholding follows a similar structure to the federal system, but rates and rules vary enormously. Several states have no income tax at all. Others tax wages starting from the first dollar. Most states have their own version of the W-4, and some allow a similar exempt claim for low-income workers. A minor working in a state with an income tax should check whether they qualify for state-level exempt status on the relevant state form.
Beyond state taxes, roughly 5,000 local jurisdictions across about 17 states impose their own income or earnings taxes on wages. Rates range from fractions of a percent to several percent, and they can apply to anyone who works within the jurisdiction, even nonresidents. A minor working in a city with a local earnings tax will see an additional line-item deduction on their pay stub that can’t always be avoided, even on low income.
Getting Over-Withheld Income Tax Back
If a minor didn’t claim exempt on the W-4, or didn’t know they could, federal income tax may have been withheld unnecessarily throughout the year. The only way to recover that money is by filing Form 1040, U.S. Individual Income Tax Return.7Internal Revenue Service. Time You Can Claim a Credit or Refund The employer sends a Form W-2 by January 31 of the following year summarizing total wages and amounts withheld.8Social Security Administration. Deadline Dates to File W-2s
On the 1040, the minor reports total wages and claims the standard deduction. If the deduction wipes out all taxable income, the calculated tax is zero and the full amount of federal income tax shown on the W-2 comes back as a refund. This works even if the minor’s income is technically below the threshold that would require filing a return. Filing voluntarily is the only mechanism to get the money back.
One critical limit: filing a 1040 recovers over-withheld federal and state income tax only. It does not return FICA. Social Security and Medicare taxes withheld from a standard paycheck are not refundable through the tax return.
Gig Work Changes the Math Completely
Minors who earn money through freelancing, selling goods online, tutoring, or gig platforms like food delivery apps face a different tax situation. These workers receive Form 1099 instead of a W-2, and no taxes are withheld from their pay at all. No FICA, no income tax, nothing. That can feel like a bonus until tax season.
Self-employed workers owe self-employment tax at a combined rate of 15.3% on net earnings of $400 or more.9Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) That 15.3% covers both the employee and employer shares of Social Security (12.4%) and Medicare (2.9%). A minor who makes $2,000 mowing lawns over the summer owes roughly $283 in self-employment tax, even though the income is far below the $16,100 standard deduction. The standard deduction shields earned income from income tax but does nothing to reduce self-employment tax.
This catches families off guard constantly. A 16-year-old who earned $5,000 on a gig platform might assume they owe nothing because they’re well under the standard deduction. In reality, they owe about $707 in self-employment tax and need to file Schedule SE with Form 1040.9Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) A minor with a regular W-2 job doesn’t face this; it only hits income reported on a 1099 or otherwise earned through self-employment.