Definition
A “minor” is an individual who has not yet reached the age of majority as specified by law. This age varies between 18 and 21 years depending on the jurisdiction. When minors enter contracts, these agreements are typically voidable by the minor. Only the minor has the right to void the contract, not the other party involved. In the context of the kiddie tax, a minor is anyone under the age of 14.
Examples
- Contracts: A 17-year-old who signs a cellular phone service agreement can later choose to void the contract, although the cellular provider is still bound by it.
- Real Estate: A minor purchasing real estate can void the purchase agreement, but the seller cannot.
- Employment: A work contract entered by a minor can be voided solely by the minor.
- Kiddie Tax: A 13-year-old with investment income will be affected by the kiddie tax rules, while a 14-year-old will not.
- Purchases: A minor who buys a car can later choose to void the purchase, but the dealership remains bound by the agreement.
Frequently Asked Questions
What is the age of majority in most states?
The age of majority is often either 18 or 21 years, depending on the jurisdiction.
Are all contracts entered into by minors void?
No, contracts entered into by minors are not automatically void but are voidable at the discretion of the minor.
Can a minor be held responsible for a signed contract?
Generally, a minor can opt to void the contract, making them not bound by the agreement. However, the other party to the contract is still bound.
What is the Kiddie Tax?
The Kiddie Tax refers to tax rules that apply to the unearned income of minors under age 14. It is designed to prevent parents from transferring large amounts of income to their children to lower their overall tax burden.
Can a minor enter into any type of contract?
While minors can enter into contracts, these are typically voidable by the minor. Some exceptions exist, particularly for necessities such as food, clothing, and shelter.
What happens if a minor voids a contract?
If a minor voids a contract, they are no longer bound by its terms. The other party, however, remains bound and must comply with any obligations unless otherwise stipulated by law.
Does the kiddie tax apply to earned income?
No, the kiddie tax only applies to unearned income, such as investment income, for minors under age 14.
Can a minor disaffirm a contract after reaching the age of majority?
Yes, but it must be done within a reasonable time after reaching the age of majority, depending on local laws.
Related Terms
- Age of Majority: The legally defined age at which an individual is considered an adult.
- Voidable Contract: A contract that can be legally voided at the discretion of one of the parties.
- Kiddie Tax: A taxation rule applied to the unearned income of minors under age 14.
- Necessaries: Goods and services needed for living, exempt from some contract voidability rules when supplied to minors.
Online Resources
- Cornell Law School’s Legal Information Institute
- American Bar Association
- Internal Revenue Service (IRS) Kiddie Tax Information
Suggested Books for Further Studies
- “Business Law: Text and Cases” by Kenneth W. Clarkson, Roger LeRoy Miller, and Frank B. Cross
- “Contract Law: A Comparative Introduction” by Jan M. Smits
- “Taxation of Individual Income” by J. Martin Burke and Michael K. Friel
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