On a typical W-2 job, 7.65% of a 16-year-old’s paycheck comes out automatically for Social Security and Medicare, and that portion cannot be reduced. Federal income tax is usually withheld on top of that, but most teens earn too little to actually owe it, and the right paperwork can either stop the withholding up front or get it refunded after the year ends. That is the short version of how much taxes are taken out of a 16-year-old’s paycheck; the details below show how to keep the number as low as the law allows.
The 7.65% That Always Comes Out
Social Security and Medicare taxes, together called FICA, are the one deduction a 16-year-old at a normal job cannot avoid. The employee share is 6.2% for Social Security and 1.45% for Medicare, for a combined 7.65% of gross wages.1Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide The employer matches that 7.65% out of its own pocket, so it never shows up on the pay stub. On a $500 paycheck, $38.25 goes to FICA before anything else is calculated.
Age does not change this. Income level does not change it either. There is one narrow exception: a child under 18 who works for a parent’s sole proprietorship, or for a partnership in which both partners are the child’s parents, is exempt from Social Security and Medicare withholding.2Internal Revenue Service. Family Employees The moment the family business is incorporated, or a non-parent joins the partnership, the exemption disappears. For every other employer, the 7.65% is automatic.
Federal Income Tax: Usually Withheld, Usually Refunded
Federal income tax is where the arithmetic turns in the teen’s favor. A 16-year-old who can be claimed as a dependent still gets a standard deduction: the greater of $1,350 or the teen’s earned income plus $450, capped at the full single-filer standard deduction of $16,100 for 2026.3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
What that means in practice: if the teen’s only income is wages and the total for 2026 stays at or below $16,100, taxable income is zero and no federal income tax is actually owed. A teen earning $8,000 for the year has a standard deduction of $8,450, which wipes out every dollar of taxable income. Most part-time and summer workers fall well under the cap.
Only earnings above $16,100 get taxed at all, and the first slice above that falls in the 10% bracket, which runs up to $12,400 of taxable income for a single filer in 2026.3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 A 16-year-old would need to earn roughly $28,500 before any paycheck dollar is taxed at the next bracket up.
The catch is that employers don’t know in advance how much the teen will earn for the year. They withhold based on what’s written on Form W-4 when the job starts, and a blank or default form triggers single-filer withholding as if every dollar were taxable. That money is not lost. It just sits with the IRS until the teen files a return and asks for it back.
How to Stop Federal Income Tax From Being Withheld
A 16-year-old who expects total wages under $16,100 for the year can claim exemption from federal income tax withholding on the W-4. On the 2026 Form W-4, the teen checks the “Exempt from withholding” box, completes only Steps 1(a), 1(b), and 5, and leaves the rest blank.4Internal Revenue Service. Form W-4 (2026) Two conditions must both be true: no federal income tax liability in the prior year, and none expected this year. A first-time worker who never filed a return automatically meets the prior-year condition.
Claiming exempt does nothing to FICA. The 7.65% keeps coming out of every check no matter what the W-4 says.
A few things to keep in mind:
- The exempt status expires every year. To continue it into 2027, a fresh W-4 has to be submitted by February 16, 2027.4Internal Revenue Service. Form W-4 (2026)
- If hours ramp up and total earnings look like they will cross $16,100, don’t claim exempt. Fill in Steps 1 and 5 normally and leave Steps 2 through 4 blank, which produces the lowest standard withholding.
- Claiming exempt without a reasonable basis can trigger a $500 civil penalty on top of any taxes owed.5eCFR. 26 CFR 31.6682-1 – False Information With Respect to Withholding
State and Local Deductions
State income tax works independently from federal rules. Several states have no income tax at all, so there is no state line on the pay stub. Among states that do tax income, many use a standard-deduction setup similar to the federal one, and low-earning teens often owe nothing to the state either. A few states set their filing thresholds well below the federal $16,100, which means a teen who owes zero federally could still owe a small amount at the state level. Most states that tax income have their own version of the W-4, and if that form allows an exemption claim for workers who expect zero liability, take it.
Local income taxes are the other deduction to watch for. Some cities and counties impose a flat-rate payroll tax that applies to all workers regardless of income, and that one usually cannot be waived with a withholding exemption. A handful of states also withhold a small amount for state disability insurance, running roughly 0.2% to 1.3% of wages where it applies.
If the Teen Gets Paid Without a W-2
Side income from freelance work, reselling, lawn mowing, or similar gigs doesn’t come with any withholding, but it isn’t tax-free. Once net self-employment earnings reach $400 or more for the year, the teen owes self-employment tax, which covers both the employee and employer halves of Social Security and Medicare at a combined 15.3%.6Social Security Administration. If You Are Self-Employed That rate is roughly double the FICA bite from a W-2 paycheck, and it applies even when total income is low enough to owe no federal income tax at all.7Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
If combined income and self-employment tax is expected to hit $1,000 or more for the year, the teen is supposed to make quarterly estimated payments on Form 1040-ES instead of waiting for the annual return.8Internal Revenue Service. Estimated Taxes Missing the quarterly payments can trigger an underpayment penalty. When gig income sits alongside a regular W-2 job, the paycheck withholding sometimes covers the self-employment bill, but the math is worth running.
Getting the Withheld Money Back
Any federal income tax that came out of a teen’s paychecks during a year with total wages under $16,100 is refundable in full. FICA is not refundable through a tax return, but every dollar of federal income tax withholding is. The only way to get it back is to file a return.
The employer must furnish Form W-2 by February 1 following the end of the tax year.9Internal Revenue Service. General Instructions for Forms W-2 and Form W-3 (2026) It shows total wages, federal income tax withheld, and FICA paid. With that in hand, the teen files Form 1040, reports the wages, applies the standard deduction, and shows that the withheld federal income tax should come back as a refund.10Internal Revenue Service. Instructions for Forms 1040 and 1040-SR
The return is due April 15 of the following year. A teen who is owed a refund rather than owing tax faces no late-payment penalty for filing after that date, but the refund sits with the IRS until the return goes in. E-filed returns usually produce a refund in about three weeks; paper takes longer.
For free filing, IRS Free File offers guided software at no cost for taxpayers 17 and older with adjusted gross income of $89,000 or less.11Internal Revenue Service. E-File: Do Your Taxes for Free A 16-year-old who hasn’t turned 17 by filing time can use Free File Fillable Forms, which is open to all ages and incomes but doesn’t walk the filer through the questions, so a parent’s help is useful.