Can a MERP be beneficial with a minor child that earns a large income? : FAQ/Blog/Solutions
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Can a MERP be beneficial with a minor child that earns a large income?

by Tom Luker on 05/01/15

Several examples come to mind:

  • If you actually perform employable services to your child [other than just feeding or changing diapers for the baby model,] the child’s enterprise could hire you. A MERP can cover EEs like any business, and the beneficiaries will be all persons on your joint IRS 1040.
  • If you work as your child’s agent [for that NFL-bound hunk or that American Idol singer] you might be employed as a W-2 EE. In that case, does the child’s enterprise have other EEs?
  • Whether your child is still a “dependent” on your IRS 1040 will affect the benefits accruing to the child.
  • If your child is self-employed, such as many artists/athletes are, then that person can also establish a MERP if it fits. Then you and/or the child’s spouse can be EEs as well as others.

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