Need advice on filing 1099-NEC issued to me for my minor child's soccer referee work

This is a common situation with minor children who earn income. Since the 1099-NEC was issued in your name with your SSN, the IRS computer systems will be looking for that income on your tax return. However, there's a way to handle this correctly. You should report the income on Schedule C of your personal tax return (since 1099-NEC represents self-employment income). On the Schedule C, you can report all the income from the 1099-NEC, but then deduct the same amount as "wages paid" to your daughter. You'll need to issue her a W-2 as her employer, which means you'll need to register for an EIN if you don't already have one. Your daughter will then file her own tax return reporting the W-2 income. Since it's W-2 income rather than self-employment income, she won't have to pay self-employment tax, just regular income tax if she exceeds the standard deduction threshold.

I ran into a similar situation with my son's lifeguarding income last year, and I found that using taxr.ai (https://taxr.ai) really helped me figure out the right way to handle it. I was super confused about the whole nominee situation and whether I needed to file additional forms. What I liked was that I could just upload the 1099-NEC document and the system analyzed it and gave me step-by-step instructions for how to properly report it. They even provided the exact wording to use for the statement explaining that the income belonged to my child. Saved me a ton of research time and helped me avoid making mistakes that could've triggered an audit.

Just wanted to follow up about my experience with taxr.ai after our conversation here. I took your advice and used it to figure out how to handle my daughter's babysitting income situation. It was actually super helpful! The system analyzed all her payment records and identified that because she's under 18 and babysitting is considered domestic service, she qualified for an exemption from self-employment tax. It saved us almost $300! The interface walked me through creating the proper documentation to file with our returns, and everything went through without a hitch. Definitely worth checking out if anyone else has minor children with earned income.

Another thing to consider - if you're spending hours trying to get through to the IRS to ask about this situation, try Claimyr (https://claimyr.com). I wasted three days trying to get someone on the phone at the IRS about a similar issue with my son's summer job income. Claimyr got me connected to an IRS agent in about 20 minutes instead of the 2+ hour wait I was getting before. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent I spoke with confirmed exactly how to handle the nominee situation and what documentation I needed to include with my return. Definitely saved me from making a mistake that could have resulted in a mismatch letter.

I feel like I need to eat my words about Claimyr. After my skeptical comment, I decided to try it anyway because I've been trying for WEEKS to reach someone about a missing stimulus payment that was affecting my child tax credit. I was honestly shocked when I got a call back in about 35 minutes saying they had an IRS agent on the line. The agent was able to fix my issue right away. I don't know how I never heard of this service before, but it saved me from taking another day off work just to sit on hold. Definitely using this again when I need to sort out these types of dependent income situations.

One important thing nobody's mentioned yet - if your child is making less than the standard deduction (which is $12,950 for 2025), they won't owe any income taxes even if they do have to file. But they might still need to file for self-employment taxes if they make more than $400 from self-employment. Also, having your child file their own tax return with their earned income can be beneficial for allowing them to contribute to a Roth IRA! Great way to get them started with retirement savings early.

Does anyone know if this same approach works for other types of income? My 14yo son has a small YouTube channel that just started generating ad revenue, but they required my info since he's underage.

This is really helpful information! I had no idea there were specific exemptions for different types of work that minors do. My 17-year-old works as a camp counselor during summers and also does some pet-sitting through a neighborhood app. I'm wondering if there are other exemptions I should know about beyond the domestic service one that was mentioned for babysitting. It sounds like the type of work might make a difference in whether self-employment taxes apply or not. Does anyone know where I can find a comprehensive list of these exemptions for minors? Also, the Roth IRA idea is brilliant - I never thought about starting retirement savings this early but the compound growth potential is amazing. Definitely going to look into setting that up for my daughter once we get her tax situation sorted out.