How To Protect Your Teen Creator’s Money: A Parent’s Guide For 2026
Your Teen Got Paid. Now What?
A brand sends your 15-year-old a few hundred dollars for a video. Next month it’s a couple thousand. Then YouTube starts depositing ad revenue. Somewhere along the way you stopped being just a parent and became the accountant, the bank and the business manager of a company you never planned to run.
Most families figure it out as they go. That’s risky, because a missed tax filing, an unread contract or a payout that got mixed into the family checking account can cause real trouble later.
This guide covers what the law says in the biggest US states, then gives you a plain 10-step plan for keeping your teen’s earnings safe.
This is general information, not legal or tax advice. These laws are new and changing, so confirm details with a local attorney or CPA. Legal details were checked in October 2026.
Why Teen Creator Money Needs Its Own Protection
In the 1930s, child actor Jackie Coogan discovered his parents had spent his film earnings. California’s Coogan Law was the response. It requires 15% of a child performer’s gross earnings to sit in a blocked trust account until the child turns 18.
That protection was built for actors, not online creators. In most states, a parent can still legally keep all of a child influencer’s earnings, since the accounts, deals and bank accounts belong to the parent. A few states have started to change that. Even where the law doesn’t force you, the Coogan idea is a good rule: the money is your teen’s, and your job is to guard it.
What The Law Says In The Biggest States
No public source ranks states by number of teen creators, so I focused on the most populous states (California, Texas, Florida, New York and Illinois) plus other states with creator-specific laws.
California. Two laws are in play. Since January 1, 2025, creators who feature a minor in at least 30% of their content must put 65% of the minor’s gross earnings into a trust. The other law, AB 1880, covers kids hired directly. It extends the Coogan Law to minors working as online content creators. Brands hiring a child creator must verify the trust account exists and pay 15% of earnings into it. Parents must also keep records and give them to the child monthly.
Illinois. The first state to act. The law took effect July 1, 2024. If a child appears in 30% or more of monetized content, the parent must set aside 15% of gross earnings in a trust, and report income, hours worked and deposits to the state labor department. The child can sue if the parent doesn’t comply.
Minnesota. Took effect July 1, 2025, with a similar trust rule and a right for the child to ask for content deletion later.
Utah and Montana. Reported to require a trust set-aside too. Details differ, so read the current text before relying on a summary.
New York. A bill, S825, would require trust accounts for minors in paid influencer content. As of its Senate page, it was still in an Assembly committee. I couldn’t confirm it as law, so treat it as a preview.
Texas and Florida. I couldn’t find a creator-specific trust law in either state. That doesn’t remove your tax, contract or identity risks, and neither state has a state income tax.
Three takeaways:
Your content and your teen’s content are different cases. The family-channel laws target parents who build income around their kids. A teen with their own channel and their own deals may fall under a different rule, such as AB 1880 in California. Ask a lawyer if you’re near the line.
No law in your state doesn’t mean no risk.
The direction is clear. Start good habits now and you won’t scramble when your state catches up.
A 10-Step Plan To Protect Your Teen’s Earnings
1. Write down that the money belongs to your teen
A one-page family agreement is enough. State that income from the channel is your teen’s, that a fixed percentage is saved before anything else is spent, and who can move money and why.
Fifteen percent of gross earnings is a sensible floor anywhere. If your teen is the main face of the channel, many families go higher. “Gross” means before expenses and taxes.
2. Open separate accounts for separate jobs
Don’t run everything through your personal checking account. Use three buckets:
A business checking account for incoming payments and expenses like equipment, software and editors. A bank will usually need an adult on it.
A locked savings or trust account for the set-aside share. In California that’s a Coogan trust. Elsewhere, a custodial account (UTMA/UGMA) or a savings account held for your teen’s benefit works.
A retirement account (step 6).
A separate account turns “where did the money go?” into a five-minute answer.
3. Avoid the payout trap
Many platforms want the payee to be 18 or older, so money often lands in a parent’s name first. That’s when it’s easiest to mix with family funds. Move your teen’s share to the right account within a few days, and deposit brand checks into the business account, not your own.
4. Take taxes seriously, even at 15
Creator income is self-employment income, and kids owe tax like anyone else.
Self-employed kids who earn more than $400 for the year should report that income. Self-employment tax (Social Security and Medicare) can apply even if no income tax is owed.
Free products and gifted gear from brands usually count as income at fair market value.
Cameras, lighting, editing software and music licenses can reduce taxable income. Keep receipts.
California, New York and Illinois tax income at the state level too.
If a brand sends a 1099, make sure it carries your teen’s name and Social Security number, not yours.
Park 20 to 30% of net earnings in a tax reserve as each payment arrives, and let a CPA refine the number.
5. Read every brand contract before you sign
In most states a minor can back out of a contract, which is why brands want a parent’s signature. That puts the responsibility on you. Check:
Payment: how much, when and how. “Exposure” isn’t payment.
Usage rights: can the brand run your teen’s face in paid ads, and for how long?
Exclusivity: will competing brands be off-limits, and for how many months?
Approval and edits: who decides what gets posted?
Disclosure: the FTC expects sponsored posts to be clearly labeled.
Exit terms: what happens if the brand stops paying?
For anything beyond a small one-off post, pay an entertainment or media attorney to review it. An hour of legal time costs much less than a bad contract.
Custodial Roth IRA. For 2026, a child’s Roth IRA contribution is capped at $7,500 or the child’s total earned income, whichever is less. Self-employment income counts, but it may need to be declared as taxable income in the year it’s earned. Keep a simple income log to back up contributions.
UTMA/UGMA account. A regular investment or savings account held for a minor. The gift is permanent: your teen gets control at 18 or 21 depending on your state. Investment income above $2,500 in 2026 can be taxed at the parents’ rate under the kiddie tax. Earned income from the channel isn’t affected by that rule. wealthvieu
529 plan. Worth considering if college is likely. It grows tax-free for qualified education costs.
One reasonable split: an emergency cushion in savings, the Roth IRA up to the limit, and the rest in a UTMA or 529. A CPA or fee-only planner can tailor it.
7. Lock down your teen’s identity
Freeze your teen’s credit at Equifax, Experian and TransUnion. It’s free for children under 16.
Create a separate business email with a unique password and two-factor authentication.
Never share platform logins with editors, agents or “growth services.” Use the permission tools platforms provide.
Send an SSN only to real payers, through secure channels, never by text or DM.
8. Learn the scams that target young creators
The overpayment check: a “brand” sends too much and asks for the difference back. The check bounces and your money is gone.
The fake sponsorship: an official-looking message asks your teen to “verify” the account or pay a fee. The goal is a stolen login.
Paid verification or monetization promises: nobody can sell an official badge.
Account takeover: a hacker redirects payouts. Use two-factor authentication and check payout details monthly.
A good house rule: if a message creates urgency or asks for money, logins or personal details, show a parent first.
9. Keep simple records every month
A spreadsheet is fine. Track date and payer, gross amount, what it was for, the amount moved to savings or trust, expenses with receipts, and taxes set aside. Keep contracts, invoices and 1099s in one backed-up folder. In California and Illinois, records are a legal duty for parents of featured children. Elsewhere, they’re what you’ll need if the IRS or a family dispute comes up.
10. Involve your teen and plan for 18
Spend ten minutes a month reviewing the numbers together. Let your teen make small spending decisions with their own share. Also plan the handover: trust accounts open up at 18, your teen may be entitled to your records, and in states with deletion rights they may ask to remove old content. Talk about it early.
When to bring in a professional
A CPA: once net earnings hit a few thousand dollars a year, or the first 1099 arrives.
An entertainment or media attorney: for exclusivity, long contracts or ad usage rights.
A fee-only fiduciary planner: when earnings are large enough for long-term investing.
Business formation advice: an LLC rarely makes sense at the start, but may later.
Be wary of managers who want a cut and also want control of the money. Payments should go to accounts you control.
Quick checklist
Written family agreement that the money is your teen’s
Set-aside percentage chosen (15% minimum)
Business account and locked savings/trust account opened
Payouts moved within a few days
Tax reserve set up, CPA contacted
Contracts read, big ones reviewed by an attorney
Custodial Roth IRA opened
Credit freeze placed, two-factor authentication on
Monthly records and a monthly money talk scheduled
Frequently asked questions
Does my teen have to pay taxes on creator income?
Yes. Net self-employment earnings of $400 or more generally trigger a filing, and self-employment tax can apply even with no income tax due.
Can I spend my teen’s earnings on family bills?
In most states parents have wide control over a minor’s earnings. But where trust laws apply, the required share is off-limits, and in Illinois your child can sue later. Even where it’s legal, using their money for the mortgage can damage trust long after the money is gone. Spending on equipment and editing for the channel is reasonable.
My state has no creator trust law. What should I do?
Do the same things anyway: separate account, at least 15% set aside, and records.
Does my teen need an LLC?
Usually not at the start. Ask a CPA or attorney once income grows.
What happens when my teen turns 18?
Trust and custodial accounts transfer to them, and in some states they can request deletion of content they appeared in as a minor. Plan the handover ahead of time.
The bottom line
Your teen’s channel is their work, and the money it makes is theirs. Separate accounts, a set-aside rule, honest records, careful contract reading and a good CPA cover most of what can go wrong.
Start this week: open a savings account in your teen’s name and move 15% of the next payment into it.
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