3. Family Employees Child employed by parents.Payments for the services of a child under age 18 who works for hisor her parent in a trade or business are not subject to socialsecurity and Medicare taxes if the trade or business is a soleproprietorship or a partnership in which each partner is a parent ofthe child. If these services are for work other than in a trade orbusiness, such as domestic work in the parent's private home, they arenot subject to social security and Medicare taxes until the childreaches age 21. However, see Covered services of a child orspouse below. Payments for the services of a child under age 21who works for his or her parent whether or not in a trade or businessare not subject to Federal unemployment (FUTA) tax. Although notsubject to FUTA tax, a child may be subject to income tax withholding. One spouse employed by another.The wages for the services of an individual who works for his orher spouse in a trade or business are subject to income taxwithholding and social security and Medicare taxes, but not to FUTAtax. However, the services of one spouse employed by another in otherthan a trade or business, such as domestic service in a private home,are not subject to social security, Medicare, and FUTA taxes. Covered services of a child or spouse.The wages for the services of a child or spouse are subject toincome tax withholding as well as social security, Medicare, and FUTAtaxes if he or she works for: A corporation, even if it is controlled by the child'sparent or the individual's spouse, A partnership, even if the child's parent is a partner,unless each partner is a parent of the child, A partnership, even if the individual's spouse is a partner,or An estate, even if it is the estate of a deceasedparent. Parent employed by child.The wages for the services of a parent employed by his or her childin a trade or business are subject to income tax withholding andsocial security and Medicare taxes. Social security and Medicare taxesdo not apply to wages paid to a parent for services not in a trade orbusiness, but they do apply to domestic services if: The parent cares for a child who lives with a son ordaughter and who is under age 18 or requires adult supervision for atleast 4 continuous weeks in a calendar quarter due to a mental orphysical condition, and The son or daughter is a widow or widower, divorced, ormarried to a person who, because of a physical or mental condition,cannot care for the child during such period. Wages paid to a parent employed by his or her child are not subjectto FUTA tax, regardless of the type of services provided.