Can I hire my daughter, pay taxes, SS, and Medicare, so she qualifies for SS?

[HarriedParent]

My daughter is stuck in that grey area between being able to work and being "disabled". She can't, and hasn't ever, worked, but is unable to qualify for disability. She has no SS quarters worked, so she will never get SS. We are her sole support, which can't go on forever. Can I hire her, pay her a wage, pay all income taxes, SS and Medicare withholding? Will those taxes paid eventually allow her to "retire" with a minimum Social Security check?

 

[Betty3]

Do you own a business? You can hire her to work for you as you would any other employee as long as you deduct all necessary/required taxes, SS etc. from her pay check. If SS is deducted, she should end up with some SS payment each month at retirement depending on how much she makes & how long she works.

 

[army judge]

My daughter is stuck in that grey area between being able to work and being "disabled". She can't, and hasn't ever, worked, but is unable to qualify for disability. She has no SS quarters worked, so she will never get SS. We are her sole support, which can't go on forever. Can I hire her, pay her a wage, pay all income taxes, SS and Medicare withholding? Will those taxes paid eventually allow her to "retire" with a minimum Social Security check?

It'll hardly be worth it, unless you pay her over $110,000 a year.

Add in taxes, and other government rip offs, I suspect that is about $150,000 to $160,000 a year out of your pocket.

If memory serves, you'll have to do that for
2 1/2 years (or more) to max out her payments at about $2,500 a month. That presumes she'd get classified as disabled.

Financially, it makes no sense.

You'd be better off discussing an annuity and funding it with about $500,000.

She might be eligible for SSDI. But, that's hardly a get along payment, not a do well payment.

SSDI pays about $700 a month, give or take.

I suggest you discuss other options with a bank (a trust fund), a trust lawyer, an insurance company(ies) and learn about an annuity.

There is also the possibility of you creating a special needs trust. We created one for our son. Talk to a good trust lawyer

 

[HarriedParent]

I don't own a business, can I do it as a private citizen? I don't want to try to max out her future SS payments, just a minimum. We do have a special needs trust, but we will only be able to fund it (on our deaths) with maybe $400,000. Certainly not enough to support her for decades. She has tried for SSI, but was denied. None of her various disabilities (anxiety, Borderline Personality Disorder, pain, etc.) is enough to qualify, but taken together they have prevented her from ever working.

 

[Betty3]

I was thinking maybe you owned a business & she would be able to actually do some type of "helpful/legitimate" (for lack of better words to use) work for you just as someone you might hire "off the streets" for a position. As a private citizen, I'm not sure this would work out - note army judge's post above. If she can't do significant work at all, talk to a lawyer or financial planner & see what they suggest. I don't know what else to tell you unless someone else here has some suggestions. Maybe life insurance payable on the death of you/your wife to her with someone to handle the money as a trustee for her? We have that set up in our family for a family member who is not able to work.

 

[disagreeable]

If she did not qualify for SSI, she will not likely qualify for SSDI after you spend all that money.

 

[HarriedParent]

I agree, she won't qualify for SSDI. I want straight SS for her when she turns 62. To get there, she needs enough quarters of contribution. Can I make those contributions by hiring her?

 

[disagreeable]

No one here is going to advise you to perpetuate fraud, you will lose out in the long run. Don't forget to factor in any associated gift taxes. Here are the requirements you must comply with:
http://www.irs.gov/taxtopics/tc756.html

 

[cbg]

No. You cannot make those contributions by "hiring" her as a private citizen. I hope this is now clear to you.

 

[army judge]

Unless you paid her about $120,000 a year, plus employer social insecurity payments and other related stuff, you'll be shelling out in excess of $160,000 a year for three or four years.

NOTE: I am to encouraging you to entertain or engage in ANY such employment action. I am only pointing out the minimum costs associated with such an action to reap a minimal return.

If you discuss funding an annuity with $750,000 for her benefit when she turns 65 +, it'll prove to be a far better deal. It also won't cause certain wealth confiscation agencies to take notice of your activities.


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