Is Peter, age 17 and employed by his family-owned corporation, covered under FICA?

Is Peter, age 17 and employed by his family-owned corporation, covered under FICA?

• A. Yes, he is
• B. No, he is not
• C. Only if he is a full-time employee
• D. Only if he completes a tax form

Answer: (A)

Peter, who is 17 years old and employed by his family-owned corporation, is indeed covered under the Federal Insurance Contributions Act (FICA). FICA encompasses Social Security and Medicare taxes that are mandatory for most employees, regardless of their age or the ownership structure of the business. In this scenario, since Peter is employed, he is subject to the same FICA tax requirements as any other employee. The fact that it is a family-owned corporation does not exempt him from FICA coverage; the IRS regulations apply uniformly to employees that meet the definition of employment irrespective of their relationship to the employer. Other considerations based on the choices include that FICA coverage does not depend on if he is a full-time employee; part-time employees are also covered. Additionally, he does not need to complete a tax form to be subject to FICA; simply being employed in a capacity that requires tax withholding means he is covered under the program.

Peter, who is 17 years old and employed by his family-owned corporation, is indeed covered under the Federal Insurance Contributions Act (FICA). FICA encompasses Social Security and Medicare taxes that are mandatory for most employees, regardless of their age or the ownership structure of the business.

In this scenario, since Peter is employed, he is subject to the same FICA tax requirements as any other employee. The fact that it is a family-owned corporation does not exempt him from FICA coverage; the IRS regulations apply uniformly to employees that meet the definition of employment irrespective of their relationship to the employer.

Other considerations based on the choices include that FICA coverage does not depend on if he is a full-time employee; part-time employees are also covered. Additionally, he does not need to complete a tax form to be subject to FICA; simply being employed in a capacity that requires tax withholding means he is covered under the program.