Good morning! Summer hiring has a way of feeling like a softer version of regular hiring — more flexible and less paperwork. The IRS, sadly, did not get that memo. A summer hire is an employee, a W-4 is still due, and EFTPS still takes a week to set up regardless of whether your new worker is leaving for college in September.

This week’s lineup:

☀️Your summer hire is a W-2 employee. The IRS doesn’t care that they’re temporary.
🧾 Calling a job “seasonal” doesn’t unlock a friendlier tier of payroll rules.
👨‍👧 Hiring your kid: real strategy, real savings, real audit risk if you wing it.
📋 Free this week: the summer hiring setup checklist every employer needs in 2026.

The Basics

☀️ Hiring Summer Help? Don’t Skip the Paperwork

Image from Envato

The Quick & Bristly: Bringing on a summer worker triggers the same federal forms, classifications, and deposit clocks as a full-time hire. The fact that they’re leaving in August doesn’t change anything the IRS cares about.

There is a long American tradition of summer hiring, and an equally long tradition of business owners doing it wrong. Not maliciously. Just optimistically. The reasoning usually goes something like: They’re only here for 10 weeks, how much paperwork could there really be?

The answer, somewhat unfairly, is the same amount of paperwork as everyone else.

A summer hire is an employee. The duration of the job has no bearing on classification, withholding, or your obligations as an employer. If you’re paying someone to show up at a place you control, do work you direct, on a schedule you set, the IRS treats them as a W-2 employee whether they’re with you for three months or 30 years. The fact that they’re going back to college in the fall is, from a tax standpoint, completely irrelevant.

What this means in practice:

Form W-4 before the first paycheck. Determines federal income tax withholding. Students often claim exempt and that’s allowed if they had no tax liability last year and expect none this year, but it’s their call to make on the form, not yours.
Form I-9 within three business days of start. Employment eligibility verification. Federal requirement. Not optional, regardless of how informal the job feels.
FICA withholding. 6.2% Social Security and 1.45% Medicare from their wages. You match it from yours.
State withholding and SUTA registration. Even for one summer worker. Most states want you on file.

The one notable exception is hiring your own children, which has its own rules and is worth its own article.

What you cannot do, no matter how clean it would make your summer, is pay a teenager $15/hour in cash and call them a contractor. Worker misclassification is one of the IRS’s stated enforcement priorities, and the fact patterns that get businesses in trouble look almost exactly like a casual summer hire. Short tenure does not move you out of the employee category. Neither does the worker preferring it. Neither does “everyone in our industry does it this way.”

The setup work is genuinely modest if you’re already running payroll. If you’re not, this is the moment to start. EFTPS enrollment alone takes five to seven business days, and has a way of arriving the week after you needed it.

👉 IRS Hiring Employees resource page

PRESENTED BY INDEED

You read the whole article. You know about the W-4, the I-9, and the FICA match. You’re doing this right. The least Indeed can do is make sure someone actually shows up to the job. Post in minutes. Hire before Memorial Day.

👉 Post your first job on Indeed — free to start

True or False: If you hire your 15-year-old to do legitimate work in your sole proprietorship, their wages are exempt from Social Security and Medicare tax, and you can deduct what you pay them as a regular business expense.

(Find the answer at the end of this newsletter)

The Strategy

🧾 Seasonal Workers Don’t Get a Payroll Discount

Photo from Unsplash

The Quick & Bristly: “Seasonal” is a real category for some federal forms but doesn’t shrink your obligations. The deposit schedule, the tax matching, the W-2 at year-end, all the same. But there are some things that are different.

The word “seasonal” carries a kind of administrative hopefulness with it. As if calling a job seasonal might unlock a simpler, friendlier tier of payroll rules where the IRS waves you through and the forms file themselves.

It does not. But there are a few real distinctions worth knowing, and a few traps worth avoiding.

What “seasonal” actually changes:

The clearest one is Form 941, the quarterly payroll tax return. If you genuinely employ workers only during certain months (think landscapers, ski resorts, summer camps, holiday retail) you can mark the seasonal employer box on Form 941 and skip filing in quarters where you paid no wages. You still file in the active quarters. You just don’t file empty returns the rest of the year. Modest, but real.

Some state unemployment programs also recognize seasonal status, sometimes with reduced contribution rates for genuinely seasonal industries. Sometimes not. Worth checking your state’s workforce agency directly.

What “seasonal” does not change:

Federal deposit schedules. New employers default to monthly. If your accumulated tax liability hits $100,000 in a single day during your busy season, you become a semi-weekly depositor immediately, regardless of how brief the season is.
FICA matching. Same rates, same wage bases, same employer share.
Workers’ comp. Most states require coverage from the first employee, including seasonal.
W-2s. Every seasonal worker who earned $1 from you gets a W-2 by Jan. 31 of the following year, even if they worked one week in July and you never saw them again.

The trap most people walk into is hiring seasonal workers as 1099 contractors to skip the payroll setup.

The IRS knows this is a popular workaround and treats it accordingly. The classification test has nothing to do with how long someone is going to work for you. It has to do with control: who sets their hours, who provides the tools, who decides how the work gets done. Most summer help fails the contractor test.

Misclassification penalties run from “noticeable” to “ruinous.” Form SS-8 is the IRS’s worker classification questionnaire if you’re genuinely unsure. Filing it is essentially asking the IRS to make the call for you, which is sometimes the right move and sometimes a poke at a sleeping bear.

If you’d be running payroll for them anyway in any other season, you should be running payroll for them in this one.

👉 IRS Independent Contractor or Employee determination page

ALSO PRESENTED BY DEEL

Payroll errors cost more than you think

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The Deep Dive

👨‍👧 Hiring Your Own Kid: The Strategy and the Audit Bait

Image from Evanto

The Quick & Bristly: Putting your child on the family business payroll is one of the most legitimate tax moves available to small business owners. It’s also one of the easiest to do wrong. The difference is documentation.

Hiring your own children is a perfectly legal, IRS-blessed strategy, and it does what most tax strategies promise but few deliver and actually saves real money. Wages paid to your kid are deductible to your business, taxable to them at their lower (often zero) bracket, and (if the structure is right) exempt from FICA and FUTA entirely.

Then there is the version of this strategy where you “hire” your 6-year-old as the company’s chief marketing officer, pay them $14,600 a year to “review the website,” and dare the IRS to disagree. That version ends badly. Sometimes spectacularly.

The line between the two is not subtle.

The rules:

If your business is a sole proprietorship or a partnership where both partners are the child’s parents, wages paid to a child under 18 are exempt from Social Security and Medicare tax.
Wages paid to a child under 21 are exempt from FUTA.
The child can earn up to the standard deduction ($16,100 in 2026) before owing any federal income tax. That’s potentially several thousand in family-level tax savings per child per year, depending on bracket.

The structure matters. If your business is an S-Corp, a C-Corp, or a partnership where one of the partners is not the child’s parent, the FICA and FUTA exemptions disappear. You can still hire your kid. The savings just shrink.

What the IRS actually checks for:

The child performs real, age-appropriate work. Filing, basic data entry, social media tasks, modeling for marketing photos, packing orders, cleaning the office. Real work that a non-family employee would otherwise do.
The compensation is reasonable for the work performed. Paying a 12-year-old $40/hour to fold T-shirts will not survive a glance, let alone an audit.
The child is actually paid. Money goes from the business account to the child (or to a custodial account in the child’s name). Not to the parent. Not “credited” on a spreadsheet.
Real records. Timesheets, job descriptions, W-2s. The same documentation you’d keep for any other employee.

This is one of the few tax strategies where the savings are large enough to justify careful execution and modest enough to attract attention if you don’t. Document like you expect to be asked. Eventually, someone might.

👉 IRS Family Help and Family Employees guidance

Freebie

🗂 The 2026 Summer Hiring Setup Checklist

Image from Evanto

Everything in today’s issue turned into a step-by-step action list. Every form, deposit deadline, and family-hire rule, in order, before your first summer worker shows up.

Download the Free 2026 Summer Hiring Setup Checklist →

🎙 Listen: Business Growth Central — “How To Hire Family Members Without Ruining Your Business.” Honest 42-minute conversation on the hidden risks, the conditions that make it work, and the kind of advice you only get from people who’ve lived it.
🛠 Use: IRS Hiring Employees Resource Hub. Every federal step for bringing on an employee, in order. Authoritative and current.
📖 Read: “What Every Student Should Know About Summer Jobs and Taxes” (IRS). Short, plain-language IRS handout written for the worker. Send it to your summer hire on day one and skip the “why is my paycheck smaller” email in week two.
🚀 Try: Get your free compliance score from Harbor Compliance and find out whether your licenses, registrations, and filings are actually as clean as you think (sponsored).

Answer: ❌ False!

Wages paid to a child under 18 in a parent’s sole proprietorship (or parent-only partnership) are exempt from FICA. Under 21 also clears FUTA. The wages are deductible to the business and tax-free to the child up to the standard deduction. The catch: the work has to be real, age-appropriate, and documented like any other job. (See today’s deep dive for details)

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☀️ Hiring summer help? The IRS doesn’t do seasonal discounts.