Family channels grew up considerably faster than the law did. That gap is closing. A handful of states now treat a child who appears in monetized content as something much closer to a working minor — with an enforceable claim on a share of the money their appearances generate.
If your kids are in your content and it earns, this is no longer a question of what feels fair. It is a compliance question with a private right of action attached.
The Illinois rule, because it is the clearest
Illinois moved first, and its statute is the easiest to reason about. The protections apply when:
- The child is under 16.
- The child's name, image, or likeness appears in at least 30% of the creator's compensated content within a 30-day period.
- That content meets the platform's compensation threshold, or generates at least $0.10 per view.
When it applies, the creator has to set aside a share of gross earnings from the qualifying content, proportional to how much the child appears. A child appearing in 100% of the content is entitled to at least 50% of gross earnings from it; appearing in half the content entitles them to at least 25%. The money goes into a trust the child can access at 18.
There are also recordkeeping duties — you have to track qualifying content, compensation received, and amounts deposited, and give the child access to those records. And if you fail to comply, the child can sue you for actual damages, punitive damages, and fees. Being their parent is not a defense.
The other states, and where this is heading
California amended the Coogan Law — originally written in 1939 for child actors — to explicitly cover minors working as content creators. Minnesota passed its own statute. Utah went further than most, adding a right for the young person to request removal of content featuring them as a minor once they turn 18. Arkansas addressed takedown procedures with responsibility split between platforms and creators.
The details differ state to state, which matters because your obligation follows your residence, not your audience. The reasonable planning assumption is that this is a wave rather than a handful of outliers, and that more states arrive over the next few years. Building the system now is cheaper than retrofitting it after your state acts.
The part creators consistently get wrong
The trust share comes off gross earnings from the qualifying content. Not profit. Not what is left after your editor, your equipment, your time, and your taxes.
For a channel running thin margins on high revenue, that distinction is enormous, and it is not negotiable by arguing about how much work you personally did. Plan cash flow around the gross number.
What this does to your bookkeeping
Here is the practical problem. Complying requires knowing revenue per piece of content, and how much of that content features the child. Almost no creator's books can answer either question, because standard creator bookkeeping tracks revenue by platform at best and by month at worst.
You need content-level revenue attribution plus an appearance measure. That is a real change to how the books are structured, and it is the same underlying discipline we describe in making creator bookkeeping actually useful — just pushed one level deeper.
The adjacent strategy: actually employing your kids
Separate from any trust your state requires, there is a long-standing and entirely legitimate strategy here: paying your children real wages for real work in the business.
If your teenager genuinely edits, manages comments, handles shipping for merch drops, or appears as scheduled talent, they can be paid a reasonable wage for that work. The business gets a deduction, and the child pays tax at their own rate — which, up to the standard deduction, is frequently zero. For a family-owned business structure there can also be payroll-tax advantages depending on how the entity is set up.
The requirements are real and not optional: the work must actually be performed, the wage has to be reasonable for that work, and you need the same documentation you would keep for any employee — timesheets, a pay record, an actual payment to an account in their name. Paying a six-year-old $14,000 for “consulting” is the version of this that ends badly.
Done properly it stacks well with a required trust rather than competing with it, and it can fund a custodial retirement account on earned income. Done casually it is one of the more reliably audited items in the small-business world.
The tax questions that are genuinely unsettled
I want to be straight about the limits here. The compliance obligation is clear; the tax treatment in some of these arrangements is less so. Whose income is it when earnings are set aside for a child — the child's, with the associated rules on unearned income for minors, or the parent's followed by a transfer? The answer depends on how the arrangement is actually structured, and reasonable practitioners are still working through it.
Treat confident internet answers on this — including short ones like this paragraph — with suspicion. It is a get-real-advice topic, and the cost of structuring it thoughtfully up front is far lower than unwinding it later.
What to do this month if this is you
- Work out whether you actually cross your state's threshold. The percentage-of-content test is more easily met than most family channels assume.
- Open the trust account if you do, and start funding it from the correct gross number.
- Start per-content revenue attribution now, even roughly. Partial records beat reconstructing a year from scratch.
- Keep the documentation the statute requires, and keep it somewhere your child could actually be shown.
- Talk to a lawyer about the non-tax obligations, including the takedown rights some states now grant. This is not solely an accounting problem.
One adjacent tool worth knowing about: Trump accounts, new for 2026, allow up to $5,000 a year in after-tax contributions for a child under 18. Useful as part of a broader plan for your kids' money — but not a substitute for a trust your state requires.
If you run a family channel and none of this is set up, that is a normal place to be and a fixable one. Book a call and we will map what your state requires against what your books can currently prove. More on how we work with creators generally here.