Anonymous asked in Business & FinanceTaxesUnited States · 4 weeks ago

URGENT Question about minor and w-9 form?

A friends daughter had done a clothing company photoshoot and they gave her a w-9 form to fill out and her daughter put her mothers name and SSN on the form because she was a minor and had no bank account. The payment was only $500 and the company said that it was fine, just wondering if that is legal, or will they go to jail/get in trouble?

Adding on, This happened 2 times so her daughter earned $1000 from the company for modeling, In January (daughter is now 18, w-9 was signed under moms name and SSN at 17 though) they sent a email to fill out a w-2 form and a misc 1900 form but the mother doesnt make enough money to file a tax return in the first place so does she even have to fill them out? and if she doesn't is there a penalty? jail time? 

Thank you

4 Answers

  • 4 weeks ago

    A bank account is irrelevant. She must correct the false information, or she is guilty of FRAUD.

  • NA
    Lv 7
    4 weeks ago

    As others have stated, the W-9 should ALWAYS have been in the child's name.  After all, the CHILD earned it. 

    Whether or not a 1099-Misc is issued, the income is still the child's and gets reported on the CHILD'S tax return. 

    You state the child made a total of $1000 from the same company.  That means there should be paperwork issued as she made more than $600 from them.  In tax law,  

    Mom is a nominee and needs to issue her another 1099-Misc, from her SSN to the child's SSN.  She would mail a copy of the 1099-Misc and a form 1096 (this is a cover sheet) to the IRS and should have done it back in January.

    The CHILD made more than $400, so the CHILD is required to file.  This is because the CHILD owes $141 of self-employment tax.

    Note, do NOT confuse self-employment tax with income tax.  The child does not owe income tax because she made less than the filing requirement.  The child DOES owe self-employment tax.

  • 4 weeks ago

    Legal, the payment is made tot he mother and is taxable to her.   You do not fill out a W2 or 1099 MISC, you receive one.  IF she gets a 1099, she has to file if it is over $400.

  • Amy
    Lv 7
    4 weeks ago

    To address the "urgency" first: if they can't figure this out before July 15, both mother and daughter should file for an automatic extension of their tax-filing due date.

    The income going to a parent's bank account is legal, but the W9 form should still have been filled out in the minor's name. No one will go to jail for an honest mistake, but correcting it might take a lot of work.

    Your question is unclear as to whether the employer sent a W-2, a 1099-misc, or a request for a correct W-9 so that they can issue a tax form with the child's SSN.

    If the employer withheld payroll taxes, and if even including this $1000 the mother didn't earn enough to file a tax return, then nobody owes any more tax. You can PROBABLY get away with letting the IRS believe the mother earned that income. It will still affect anything else that asks how much income each person earned, such as social security benefits.

    If instead the employer issued a 1099-misc, then somebody owes self-employment tax. The mother could still file and pay it under her own name, but at this point we're getting into intentional fraud. The daughter should file and pay as if the 1099 was in her name. 

    They should communicate with the employer to get the forms corrected. And obviously the 18-year-old should fill out a new W-9 with her own SSN. The mother might get a letter from the IRS saying she owes tax plus a late-filing penalty and late-payment penalty. If so, she should explain the situation and work with them and the employer to correct the mistake.

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